VIX just reached a 10 handle, something it hasn’t done since Aug 5, 2015 — shortly before SPX fell off a 245-pt cliff.
If you were to ask me how low VIX can go, I’d have to answer “as low as it needs to in order to keep stocks melting up.”
continued for members…
USDJPY is pretending to move higher, but clearly has no appetite unless there’s an emergency. If it did intend to move higher, it would stop toying with reentering the rising white channel it broke out of and backtested already. 
CL, despite yesterday’s bullish API inventory report, has broken trend again. This latest thrust higher has remade itself several times, each a less steep rising channel. A reminder, we have an EIA inventory report coming out at 10:30.
As in Aug 2015, SPX should have a little more upside left — at least to get it through the end of the year. Yesterday’s breakout of the falling purple channel wasn’t very impressive. You get the feeling TPTB would be happy enough if SPX merely went sideways for the next week or so. 
The SMA10 is up to 2258.24, so we’re technically back in potential backtest territory. That is, SPX could possibly backtest the SMA10 without dipping back into that purple channel — either late today or early tomorrow.
For those looking for a day trade, there’s an opportunity here to play that backtest to 2258, though the purple midline could get in the way yet again and the SMA5 200 is not far below at 2264.50. If it were to occur, and the odds are 50:50 at best — chances are it would take all day and yield 10 points. A drop though the SMA5 100 at 2268 would be the signal.
It’s important to note that TPTB have made little effort to backtest anything lately. It’s the year-end dash for cash, and all pretenses of a normal “market” have been thoroughly discarded.
I will sign off now so I can post some other charts that were promised. First up, NG.
A reminder, I will be out of the office altogether on Thursday and Friday. I might get a chance to post a wrap-up after the close. But, there won’t be any intraday commentary. Anyone playing the short from above, keep an eye on CL and its reaction to the inventory numbers. The SMA10 will be higher on Thursday, so that will affect the potential target price by a few points.
If SPX should decline below the SMA10, by all means look for the 2258 tag. And, if that should fail, then the next support isn’t until 2248ish. My expectation, however, is that SPX will bounce at 2258-2260.
GLTA.
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UPDATE: Dec 22 9:35 AM
Backtest completed at 2259.14.
UPDATE: Dec 23 9:52 AM
SPX closed below the SMA10 at 2262.10, is currently backtesting it. If it can punch through, the upside case is reinforced. If it can’t, then 2248 and, then 2236.35 (the bottom of the rising purple channel) are the next support.
Based on the way VIX is being walked higher, there appears to be another leg down to come. Consumer sentiment and new home sales are coming up at 10AM, could be the catalyst. Good numbers reinforce the likelihood of those other rate hikes later this year, while bad numbers reinforce the mismatch between the economy and the “market.”
USDJPY is still on the sidelines. 
And, CL is playing cat and mouse with a TL off the November lows. It has broken below the rising purple midline, but hasn’t really broken down yet.
Last, I’ve been keeping an eye on RUT since it reached our upside target recently. The initial selloff was pretty straightforward. It was followed by a breakout last Thursday which has subsequently broken down. It’s making another comeback attempt today.