Futures are up modestly as we approach OPEX, with yesterday’s drop recasting the rising wedge as a rising channel – a more apparently bullish pattern. Naturally, VIX has “broken down” all over again. And, naturally, the algos are listening…

The post-OPEX picture still offers the possibility of a 10% drop. So, while the next 36 hours look worry free, caution is still warranted for bets extending into next week.

Note that the bottom of the purple channel is running neck and neck with the SMA200 and both are quite close to a what would be a 10% drop. This isn’t to say there should be a drop, just that any crack in the bullish landscape could well be hiding a crevasse. Remember, since SPX has already tagged its 1.618 and ES hasn’t, there’s a very good chance that ES will do so after-hours and quickly reverse in order to prevent SPX from doing the same.On the other hand, markets often begin to sniff the month-end and year-end right about now. This one still has a lot of momentum going for it, though the RSI chart still argues for a a potential downturn.In fact, some of these OPEX dates have been the scene of pretty significant selloffs. An important VIX trend line / channel bottom of support is only 1.60 away. So, bears still need VIX to break out of the falling white channel again.CL tagged the channel line of support, dropping through and backtesting its SMA50 in the process. This suggests the SMA100/channel top is still in play around 73.58, with the SMA200 very much in play as it approaches the red .618 over the next few weeks. RB is still hanging on but still looks quite likely to test its SMA200 and/or channel bottom.In the currency space, USDJPY is gently backing off Tuesday’s “breakout” but is holding its SMA10 and SMA20. While EURUSD is getting a mild bounce off its .618… …and DXY is lingering at its flag pattern top, still contemplating a run up to backtest its broken purple channel bottom.

UPDATE:  10:20 AM

The bulls need to catch SPX right here and stop VIX from breaking out. I’m going to hop on a conference call, will continue with yesterday’s currency update around noon.