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Everything’s falling into place now, with ES almost to its SMA200 and SPX sure to follow.
This is a much better bounce spot (if there’s going to be a bounce) because, as we discussed several weeks ago, it also represents SPX’s 2.618 Fib extension.
Meanwhile, the 10Y and 30Y are threatening breakdowns. ZN, having reached our 113’180 target yesterday, is hinting at a test of its former highs.
And, TYX appears to be dropping through the bottom of a channel from 2011. 
And, CL has just about reached our most consequential downside target from many months ago.
Bottom line, this is critical support for both bonds and equities.
continued for members…The big picture for ES and SPX. My gut tells me we’ll see a nice bounce off of SPX 3045.74. If not, things could go south in a hurry.
VIX still has plenty of headspace.
And, USDJPY looks ready to either plunge or snap back. My guess is the latter, so I’d short with an obvious initial target the SMA200 several juicy ones below if it doesn’t hold.
With EURUSD continuing to climb a little more as DXY settles lower.
The bond market is still bearishly aligned, so it would take a strong reversal, a strong bounce in USDJPY or CL, or a strong decline in VIX to stop the bleeding.
UPDATE: 10:25 AM
SPX has reached 3045 and continues to slip lower. A reminder of the major support levels below, with the next very strong candidate being the 2.24 at ES 2728 – within one point of the purple .618 retracement of he 2018-2020 rally. Remember, ES and SPX are out of sync. The equivalent SPX 2.24 is 2703.
UPDATE: 12:05 PM
Nice bounces so far, but we’ll see if it sticks. I have to run to an appointment, should be back before the close.
UPDATE: 3:55 PM
There’s the next downside target for SPX and the purple midline (unmarked) for ES. The midline has worked pretty well six times before, but circumstances weren’t near as dire. And, exactly what would a rate cut do to prevent the coronavirus from spreading?
Bottom line, another potential reversal point if TPTB can come up with a miracle cure. Otherwise, that much closer to our former highs (SPX 2939.86 and ES 2947) and then our 2.24s.
