Futures made a valiant effort to recover yesterday’s losses, even climbing back above the 10-day moving average by the close after coming within a few points of our 3336.50 target.

But, the selloff continued overnight, with ES shedding about 30 points from the close before beginning the obligatory recovery as the open approaches, egged on by soothing comments from CNBC’s guest host James Bullard, who has a distinguished history of appearing whenever TSHTF. From all appearances, even the machines are starting to take seriously the potential for the coronavirus to evolve into a global pandemic.

continued for members….

First, this morning’s charts.  I’ll be back in a moment with commentary.

ES is still doggedly trying to hold its breakout status, bouncing off the yellow channel top a second time and still above its critical 1.618 Fib. SPX is technically safer from a Fib standpoint, though it has yet to regain its rising red channel.

VIX is still in a good position to put a halt to runaway drops with a drop back through the SMA200. It might be costlier than usual given the swing in sentiment. There’s still very good potential for a breakout to the very logical targets we’ve had in place for months. On the currency front, USDJPY’s BS breakout continues as the risks mount for DXY.DXY is at or near overhead resistance with bearish implications… …as EURUSD has reached strong channel bottom support discussed over the past few days. Remember, a bounce by EURUSD means additional weakness for DXY at a time when stocks need it to keep rising.GC is rising along with DXY, certainly unusual, implying a strong reversal for DXY which would not be constructive for stocks.

Meanwhile, TNX has almost reached our next downside target……as ZN illustrates strong resistance. This is a now or never moment.

Not surprisingly, the 2Y is back below 1.40% and the 2s10s slumped as low as 11bps — both sell signals for stocks. RB and CL are both backing off their recent spurts – again, reflecting a new economic reality for a change and signalling continued equity weakness.UPDATE:  9:50 AM

ES just tagged 3336.25 – time to bounce if it’s going to. Remember, if it doesn’t bounce, SPX’s 1.618 is way down at 3306.51. And, if these 1.618 extensions don’t hold, it could be game over for stocks.Note that TNX has also reached our downside target…

…and CL is nearing TL support.BTW, though “saving” the stock market at this point will require a bounce in TNX, remember that we’re looking for much lower rates in the future.The cycle study I did last year shows a late 2020 drop to or below zero.

The bearish signals are mounting. All that’s left is for ES to drop through 3336.49. Stay frosty.