It took six sessions, but SPX is finally back above the neckline we laid out two weeks ago.  For the bulls, this was an important achievement.  It not only gives them a new, higher level of vital support than the SMA200.  But, it gives them a specific upside target which.

Note that IH&S upside targets have eventually been achieved nearly every single time over the past 9 years.  It’s important to note, however, that the patterns themselves have sometimes busted before the price objective was achieved.

VIX has reached our next downside target right on schedule.  As we’ve discussed, the path was almost a certainty given the difficulty USDJPY and CL face in continuing their bullish ways.  The algos aren’t picky.  VIX’s (unnaturally orderly) 32% collapse over the past 7 sessions has worked just fine.While this is an important milestone, there are two more important ones to achieve before we can say the bulls are in the clear.

continued for members…

Assuming the neckline holds, the next major target is the 2.24 – 2703.62 for SPX and 2728.79 for ES.  Then, of course, SPX must find a way to break out of the falling purple channel and make new highs.But, let’s not get ahead of ourselves.

I would include DJI’s SMA100 in the important obstacle category.  If/when it is cleared, the Dow has plenty of upside.The theory I toyed around with re COMP postponing the backtest of its SMA200 appears to be playing out.  Note that AAPL is leaving the barn, which supports the idea that COMP’s backtest will wait until it can take place at higher lows.

The currency picture remains unhelpful.  The basic problem is that stocks don’t want to see rates go any higher.  But, DXY is intent on slumping if it isn’t propped up with high rates.

And, in the meantime, the yield curve has resumed its collapse.This leaves USDJPY without the requisite support that it needs to, in turn, support stocks.UPDATE:  10:49 AM

SPX just about to its 2.24.  We could get a pause here.  But, if it pops through, the next resistance isn’t until ES reaches its 2.24 at 2728.79, about 2728 on SPX.