Following the shocking election results in the US, futures actually tagged our downside support at the 50-day moving average and, in a 2% surge, our next upside target.

The spike has all the hallmarks of a pop and drop, however, as the 10Y has broken out.
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The backtest is obvious, though the ES IH&S target and SPX 1.618 Fib are still lurking out there – potential targets for an end of the year grind-it-out higher. Note that the initial surge suggested by ES won’t get SPX all the way to its 1.618 at 6009.

Another reason why the futures’ are probably ahead of where they should be…VIX’s tag of our SMA200 target. It would be unusual not to see at least a strong bounce after this 25% plunge.Currencies also suggest a pullback after the open, as EURUSD has reversed strongly at our upside target, breaking down below the red TL.

Though there is a strong possibility that the DXY’s surge to the top of its falling red channel will pull back, leading EURUSD to rebound to 1.078. Oil and gas remain a problem for inflation, but one that as we discussed yesterday will take until mid-December to play out.