Lots of moving pieces over the holiday weekend — which are typically used to leapfrog stocks up past resistance.  Our analog said otherwise, this time, and we will be rewarded with a nice gap down on the open.

ES is currently off 9.25, but was off double digits before oil futures began their latest algo-nudging ramp job.  It’s more than a bit ironic, as the Saudis went out of their way yesterday to announce that the recent OPEC agreement which was used to prop up oil prices, and thus stocks, into the year end is likely to be unwound in six months time.  Naturally, CL rallied on the news just like it did on the latest bearish inventory figures.

continued for members…

VIX is trying to hold the falling white channel, but should ultimately fail.  The .786 at 13.89 looks like a good intraday target.  Note the SMA200 is now down to 14.21, very near the .886 at 14.26.  So, it could work just as well if not better.

USDJPY is trying to hold the falling white channel bottom.

Our downside target for SPX remains the same, with 2212 still appealing if the SMA50 overshoots.  It’s now up to 2219.30, so it’ll be that much tougher to reach 2212.

As we discussed last week, SPX is now back above the purple H&S neckline, the SMA10 and the SMA20.  So, there’s plenty of support between here and there — with the initial level to worry about being 2264ish followed by 2252.14 and 239.15.  Keep an eye on CL to see if its breakout fails and it drops back through the SMA10 and 20.

UPDATE:  9:39 AM

Quick progress report.  SMA20 test coming up.  ES is trying to hold the red channel top – a backtest rather than a breakdown.  It’s done so 15 times since first “breaking out” on Jan 4.

UPDATE:  2:29 PM

Finally getting some movement, as this morning’s VIX and CL-inspired bounce backtested the yellow neckline, but didn’t follow through.  Likely just buying time to let the big guys position themselves for the decline.