As long as the rising white channel isn’t broken, then we still have a breakout on our hands. And, remember, this is a breakout of a breakout. Channel support is around 2625.There are plenty of downside targets is 2625 doesn’t hold. But, since VIX is already being beat back from its earlier highs, I wouldn’t hold my breath. A bounce by DXY and USDJPY would also do the trick. Given that USDJPY has reached our channel target, a bounce (at least interim) seems likely.Note that EURUSD has reached our next upside target. And, DXY is closing in on our downside target… GC has reached our next upside target — a good place to switch sides, as TPTB are unlikely to allow the run up to 1377 in such an environment.The question on everyone’s mind: can the politicians (and Draghi) keep their mouths shut long enough for the bounce to take hold?
If the white channel breaks down, the red channel bottom is down around 2790. If the red channel breaks down, the next major support isn’t until the 2.24 at 2728.79 — nearly a 4% drop, the likes of which we haven’t seen since 2016.