VIX’s rising TL has been a solid guide to lower stock prices.  This morning it is indicating another, more serious breakdown than the head fake we saw on Monday.Along with USDJPY’s “breakout” it has been enough for the algos to bid futures up to the top of their falling channel for the 10th time this month.

There are two ways to look at this.  One is very bullish, while the other is quite bearish.  It’s decision time for stocks.

continued for members…

What looks like resistance for ES…

…is bound to lift SPX out of its falling channel and above its 2.24 Fib extension – a breakout.Keeping bears’ hopes alive: RB and CL, which seem poised to take advantage of the latest equity ramp to finish their decline (EIA inventory is due out at 10:30)… …and, EURUSD and DXY – which should run out of steam pretty soon. If SPX is going to reverse, we should see it somewhere between the purple neckline (1) at 2714 and the SMA10 at 2718.66.

In so doing, it could put in another larger right shoulder than would have been created by Friday’s bounce.

Again, the key will be the extent to which SPX can ignore weakness in oil and gas and find all the support it needs from USDJPY and VIX.

COMP, and a few of the FAANGs we’ve been watching…

UPDATE:  10:34 AM

Bears are getting no immediate help from the EIA, which just reported a smaller build in crude and comparable draw in gasoline versus yesterday’s API data.

SPX sliced through its 2.24, SMA10 and purple neckline — a breakout.  Is it a head fake? About the only ray of hope for the bears is ES, which has yet to push above its 2.24 extension.  If it can hold below 2728.79, all is not lost.

More later.

UPDATE:  11:52 AM

ES did, in fact, reverse at its 2.24.  But, we haven’t seen much of a pullback – just 10 points so far.  SPX is clinging to its SMA10, seems likely to at least backtest 2703 as its short-term SMAs arrive. RB and CL just reversed a few minutes ago.  Perhaps the bounce wearing off? UPDATE:  4:40 PM

From all appearances, SPX has broken out — closing above the 2.24 extension.  Of course, we’ve seen this turn out to be a head fake as recently as last Thursday.  This one is probably different in that it broke out of the falling white channel.  But, there are no guarantees. ES, by contrast, only broke out intraday. CL and RB are heading south. USDJPY is backing off its “breakout”… …and, EURUSD is close to a potential bounce point.Last, though VIX’s TL on the 60-min chart clearly broke down……there’s the huge white channel channel midline to consider.VIX reversed off the yellow midline, but the yellow channel isn’t in charge any more.  Something to think about — especially if CL continues plunging to below 60.