On December 24, the President’s Working Group on Financial Markets met “to discuss coordination efforts to assure normal market operations.”  Most people call the PWG the Plunge Protection Team.  Can you blame them?

ES rebounded 10.4% since then, and “all” it took was a carefully constructed 45% collapse in VIX.  As we approach our next upside target, we’ll take a look at the likely next steps.

continued for members…

The bigger picture for VIX shows it coming up on the white channel bottom.  If it holds, SPX runs out of steam.  If it breaks down, SPX keeps going.At present, ES/SPX are nearing their necklines.But, it’s important to note that SPX is also nearing its wave 1 lows at 2583.23. Whether or not you believe in Elliott Wave Theory, this is a price point to watch.

CL and RB are also at important inflection points.  CL, which overshot its white channel bottom (also on December 24) is back above the channel bottom…

…but, faces the yellow channel line, rising white channel top and .500 Fib at 51.47. RB way overshot its channel bottom, so now faces a backtest.

No guarantees, but I think it would be worth taking profits on CL and RB here and reverting to short with relatively tight stops.

So, it’s interesting that USDJPY is rolling over, failing to bust back out of the gray channel into which it broke back down… and the EURUSD is finally breaking out.So, DXY finally has the go ahead to break down.

UPDATE:  2:10 PM

Fed minutes just released and I’m slowly making my way through all 28 pages.  The market’s reaction is fairly muted.  The dollar is selling off a little more and equities are off their highs.  But, of course, VIX hasn’t even reached 19.64 yet. UPDATE:  2:50 PM

Here we go.