For those who enjoy chasing the market higher on rumors of an imminent breakthrough on the China trade deal (coincidentally released shortly before futures open every Sunday) today is your kind of day.

After retracing 78.6% of its late 2018 plunge last Monday, ES showed signs of a retreat.  But the latest news — this one planted with the WSJ — has put an end to that.  At what point will the algos ignore this ruse and pay attention to deteriorating data?

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It’s the same suspects that usually ignite the algos: VIX, USDJPY and CL. Though, bonds got into the action late last week.Interestingly, SPX came up .23 short of its .786 last Monday.  With futures currently up 9.25, there’s a possibility this will be an actual tag.  The key level to watch is 2813.49.  Basically, anything below it suggests a short, while staying above it invites a long position.  Stops are important in either case. The key level to watch with VIX is 13.42 — the new low set on Friday. If SPX stalls at 2813.72, look for VIX to make new lows (assuming TPTB are aiming for new highs.)Note that VIX has its final Fib support level at 13.14, the .886 of the rise from 10.17 last August to 36.2 in December — the day that Mnuchin convened the PPT.

EURUSD is, again, balking at any kind of rally whatsoever.DXY is enjoying the boost.

UPDATE:  11:00 AM

This morning’s gap was just closed.  Decision time…  If it doesn’t magically bounce here, the next support is the SMA10 at SPX 2787.82 and, slightly below there, ES 2784ish.  The top of VIX’s falling white channel is about 15.84. UPDATE:  11:49 AM

ES is threatening to drop through TL and channel bottom support.  If it does, the next support is at the SMA20/.707 Fib at 2762, followed by the SMA200 at 2751.44.  Those levels for SPX are SMA20 at 2757.31 and SMA200 at 2749.63.