Futures are slightly positive this morning even though RB and CL are slumping — primarily on an overnight VIX dump — off 9.9% from yesterday’s highs. Note the SMA10 at 10.08.Traders will remain focused on Fedspeak and North Korea, either of which has the potential to upset the month-end run for the barn.

SPX and ES both reached our initial, minimal backtest targets yesterday.  As I posted last night, the next steps are a bit muddled.

continued for members…

The test will come right off the bat with the top of the falling channel at about 2500.  Note the presence of the SMA10 at 2500.89.

ES is already testing its SMA10 at 2499.82.  I’d keep a close eye on it to see if it breaks convincingly above 2500.  If not, a leg lower is likely on the way.

CL is off about 1%… …while RB is currently off around 0.60%.

At an average price of 2.57 nationwide, gas is up about 19% from Sep 2016.  Note that in March of this year, an 18% YoY increase in gas prices translated into 2.4% CPI. DXY is testing its SMA50 and yellow midline.  It remains to be seen whether or not it can maintain this bounce or still has another leg lower left. USDJPY: TL and SMA200 resistance.

UPDATE:  12:15 PM

After the initial pop, SPX and ES have settled back into their falling channels.  VIX isn’t forcing the issue, and CL/RB are still settling lower.  Bottom line, the breakout has been reversed and nothing is happening at this time to indicate we won’t get another leg down.  This is not the same as saying we will get another leg down.  Just means the door is still open, and the hints are that stocks will go lower before going higher.  I’m going to take a couple hours off and work on some other things.  More later.