Just when I was about to lose faith in the ability of investors to recognize bad news when they saw it, something very rare happened yesterday.

VIX, which has been beaten down most every day since Mnuchin convened the Plunge Protection Team in December, suddenly popped up above its 200-DMA.The futures executed a 51-pt reversal before someone realized how ugly things were getting and pushed the EMERGENCY button.  ES climbed back above the SMA10 just before the close, and is back above it now.  But, it’s still well below our sell signal — the .786 Fib at 2812.13.

Incidents such as this accentuate the cracks in the technical picture which are becoming more and more apparent — even to the bulls.

continued for members…

ES’s rising wedge has clearly broken down… …joining SPX, whose rising purple channel broke down over a week ago.VIX – ready to recover?  It’s easier to see ES’ broken rising wedge here.

USDJPY has reached the point where it must head lower or break out……even as EURUSD continues to facilitate DXY’s creep higher post its recent backtest.

And, CL and RB don’t have a lot of immediate upside potential. Bottom line, this is a good start toward some very low downside targets such as my personal favorite: SPX 2138.  But, first things first. There are multiple layers of good support: the neckline and .707 at 2767, the SMA20 at 2761.62, the SMA200 at 2750.04, the gap at 2725.47 and finally the 2.24 at 2703.62.  And, let us not forget COMP, which has a very important backtest coming up: its SMA200 now at 7478.81.  It came within 23 points (about 0.3%) yesterday before knee-jerking back above its SMA10.UPDATE:  2:10 PM

Another exciting day of watching paint dry…  Note that COMP and SPX are both about 1.4% away from their SMA200s.  I’m going to run out to an appointment.  Should be back before the close.