The ECB’s taper is about as dovish as anyone could expect.  Markets have barely budged, so far, with a 3.3% additional decline in VIX following yesterday’s backtest dispatching any jitters and keeping eminis in positive territory.continued for members…

The euro is weakening, but not outrageously so.  It has initial support at the SMA100 at 1.1674, but I suspect it’ll eventually test 1.1298 (white dot) as we move into year-end.It is just enough for DXY to finally tag the falling SMA100.While the bounce off our 91 target has been substantial, I’m still looking for a further drop to 88.682.  The timing is uncertain, with the falling white channel and larger white channel suggesting Dec 7ish.Stocks bounced back yesterday largely on VIX’s plunge from 13.2 to 10.99 — a 16.7% drop.  It was enough to get ES back into the rising purple channel.

As a reminder, this little purple channel lies within the rising red channel… …within the lowest quadrant of the much larger rising purple channel.The bottom of the large purple channel is currently around 2392 and is rising at roughly the same slope as the SMA200.  So far, they’ve held ES to the top of the red channel ever since the US election almost a year ago.

It broke down below the midline on Aug 17 and didn’t get back above it to stay until Sep 11.  So, I have a backtest of hte midline and the red 1.618 at 2533.46 around Nov 10.  But, I continue to advise shorting ES/SPX on any drop through the SMA10, currently at 2560.  The SMA50 is now above 2500, and would make a nice backtest heading into the last couple of months of 2017.

SPX’s version of this is still an utter mess from a charting standpoint.  It was making great headway above the red, dashed TL until Aug 17, at which point it broke down and bounced off the SMA100.  It bullied its way back above ther red TL on Aug 31 and again on Sep 11, backtesting it and thenm breaking out of what seemed like a well formed channel shown in white.  It’s now about to backtest or at least test that white channel, probably at the yellow 1.618 at 2536.31.The bigger picture shows SPX hanging in the top of the rising purple channel since 2009 on the log scale, and using the entire gray channel on an arithmatic scale.  Like I said, it’s a mess. UPDATE:  2:50 PM

Lots of noise, not much direction.  ES is right where it started the day, up 2 points.  It’s hanging on to the rising purple channel, but not breaking out — making me wonder if we might finally get some follow through.

UPDATE:  3:48 PM

Note that GC is about to reach our next downside target — tagging the SMA200 which is currently about 1259.80.RB is making new highs, while CL is merely threatening at this point.