Can VIX be contained for another few days? If you want to know what’s going to happen in the market this week, that’s the critical question.

As weak earnings reports and economic data have dribbled out over the past week, VIX has tested its 200-day moving average almost every day. Every time it comes close, it gets smacked back down. So far, those tasked with preventing another leg down in stocks have been able to hold the line.

It’s how ES, directed by algos, climbed back above its 50-day moving average and managed to remain there. So far, at least.

continued for members…

The 60-min chart shows this is the 3rd H&S Pattern to be completed so far in July. The previous two were thwarted by a plunge in VIX. The jury’s still out on this one.

Another leg down in stocks will completely depend on VIX’s ability to top the SMA200 and remain there.  It’s true for VIX and VIX futures, which is the simpler, easier chart to read. Currencies are also on edge, with USDJPY’s failure (so far) to break down completely responsible for NKD poking out of the falling white channel and above its SMA200 (so far.)

Rocked by the latest Gazprom drama, EURUSD is more visibly backing off its SMA20…

…allowing DXY to bounce a little more off its backtest.GC and SI are split… …and BTC is sliding again.Oil and gas are slightly higher… …perhaps in sympathy to the NG spike.But, the 10Y is lower this morning – meaning the tide continues to slowly turn in favor of the bears.Stay tuned.