Futures are up nearly 100 points following the FOMC’s 50 bps cut yesterday. With many factors at or near important support/resistance, it’s VIX’s breakdown that deserves special attention. Not only has the TL been broken, but the SMA10 is about to dip back below the SMA20.Naturally, this propelled ES to new all-time highs and that much closer to our next upside target – which will likely be reached before the November CPI report which should recast yesterday’s decision as a mistake.

continued for members…

The last time VIX saw a 10/20 cross, following the early August spike, stocks stabilized and started toward their new highs. Note that VIX’s RSI TL of support is also at risk.
It appears as if ES might be constructing a rising wedge, shown below in red. Note that SPX’s RSI is in position to either reverse or break out.

EURUSD is still retesting the purple .886.While USDJPY is testing a TL of resistance from the July highs as well as the SMA10 and SMA20. But, CL and RB are still bouncing…

…which has the 10Y testing a TL of resistance from Jul 1.I think traders might fade this spike, at least enough to avoid the creation of a big gap that would weigh down the next advance.

But, these VIX breakdowns are very reliable. If it closes below 17 and the RSI breaks down, bulls are still very much in charge.

GLTA

UPDATE:  12:50 PM

SPX just came within a point of our IH&S target of 5727.  Be prepared for a possible pullback, probably to the SMA50 around Sep 29-30.