And, of course, the algos are eating it up.  VIX finally dropped below its SMA10… …and, ES finally pushed above its.The biggest story from a charting standpoint, however, is the Dow.  As we discussed on Tuesday, it has the opportunity to complete an Inverted Head & Shoulders pattern at 26,360 this morning.  Given where the futures are, keep an eye on this important test.

continued for members…

If the algo holds up, today should be the equivalent of roughly June 21-22, 2015 [see: Time to Pivot] though with tomorrow being the end of the week/month ahead of a holiday weekend, I’ve thought there was a good chance that the rally might extend into Friday.

The Dow is an issue.  Even though ES and SPX aren’t constructing an IH&S, DJIA is.  Completing the IH&S could send it on a rip that would be hard to rein in if next week is meant to be the start of a 7% downturn (per the analog.)

This is what the Dow did at the 2015 top – a potential IH&S that never really played out even though it completed.  It managed only slightly higher highs before falling apart. And, this is what SPX did.This was the chart from the morning of the 22nd, showing the .886 tag we were expecting.

Should DJI’s current pattern play out this time, it would target a new high. But, our analog indicates a lower low first.  Needless to say, this would be one heck of a head fake — like many of the moves we’ve seen so far.  The fact that we’re in this situation at all after the weakness we saw yesterday, is just another example.

SPX should reach our 2917 target from Tuesday near the open.  Then, I had seen this as an IH&S opportunity.  We’ll have to see if we get any kind of pullback.

ES is sitting right at  TL resistance.

Algos will be watching VIX closely, with the SMA200 looming as strong support.  A drop through it would enable a strong finish to the week. Algos are also still focused on CL, which continues to threaten a breakout past its SMA200……and USDJPY, which has finally broken out past its SMA10 and 20.  Notably, the SMA10 is crossing above the SMA20.Ditto for NKD. UPDATE:  11:53 AM

It’s been pretty nerve wracking, but DJI just pushed above its neckline.  At the same time, ES pushed above its small scale .886… …as SPX is approaching its. Time for VIX to make up its mind about its SMA200.