Güten Tag

ES just tagged our next downside target of 2810.98 — a good tag, if you’ll pardon the bilingual pun.  It came within 3 points yesterday before a sudden VIX beatdown and rally in oil sent it soaring 24 points into the close — par for the course for this “market.”

Recall from last week’s US Dollar: Capitulation that we listed 2810 and the bottom of the rising red channel at 2788 as targets.

ES continues to hold the white channel bottom as it backtests the red channel top. If it breaks down, there’s support at the SMA10 at 2810.60 and the red channel bottom around 2788.

By delaying the mini-correction, ES is able to tag the bottom of the rising red channel at 2810.  Pretty clever.

If it can hold right here, we should see SPX tag our 2808.16 target.  If the channel bottom doesn’t hold, then the larger white channel midline (2790ish) comes into play.  If the midline doesn’t hold, then watch out below.  The 2.24 at 2703 is in desperate need of a backtest.

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