The breakout is in full bloom, raising the question of whether it’s a deep retracement or the path to new highs. VIX’s recent breakdown and bearish (bullish for stocks) 10/20 cross would argue the latter…

…though lower lows would be more convincing.

continued for members…The picture for ES/SPX:

If there’s any hope for this train to derail, it lies with a CL backtest… …and/or a USDJPY reversal.But, for now, DXY seems to be in no danger of breaking out. The concern has shifted to the potential for it to break down again. I don’t believe it will, but the algos seem to think so.The culprit is EURUSD, which is still bouncing and is likely to continue doing so until at least the backtest of the fan line, channel top and SMA100 at 1.1810-1.1820. Between that and VIX’s potential to retest the purple channel bottom (15ish), SPX and ES clearly have the potential to top the Sep 2 highs. Note that VX futures are also bullish for stocks with downside potential to 14.40ish.

Now that their .786 Fib retracements have been gapped over, the .886s (4515.42 for SPX and 4516.50 for ES) are all that stand in the way of new highs – the completed white H&S patterns and numerous gaps down below not withstanding.

The other possibility, of course, is that ES/SPX are playing for an A-B-C correction that peters out at a higher low – similar to what is likely happening with DJIA and COMP, whose H&S patterns are also looking very doubtful at this point.

I’ve posted the chart below from time to time. While it doesn’t tell us what lies ahead, it does an excellent job of illustrating the market’s current position.  If VIX holds current support, we’ll get more equity downside. If it breaks down, as it has many times, equities will push through to new highs.

A couple of other odds and ends…

BTC has pushed through its .886 on hopes that the ETF gods will smile on its latest incarnation. Although the channel top is pretty clearly defined, we did see it topped last April.  RSI has clearly broken out.

And, gold and silver continue to fumble along – not making much headway despite the very strong, definitely not transitory, inflation.  Even though SI has broken out of the TL connecting its recent highs, it faces the purple channel bottom, white channel bottom and red fan line at 24.18. If it should push through all of those, it still faces a falling SMA100 and SMA200. The bearish case for GC is more clear, with overhead resistance coming from the red TL, the SMA100 and SMA200, and a red channel line. Unless GC can push through RSI 60ish, this should continue to be dead money.UPDATE:

The charade continues, with VIX making a lower low, dropping temporarily below the .886 at 15.77, and SPX closing slightly above its .886. ES closed below it’s .886, but the night is young. Note that VIX still has room to drop without breaking any rules.