Once again, we reach an upper target for our analog without having tagged the downside target. It’s not that there weren’t opportunities. But, the cheerleading has been loud and long, with winks and nods over the last 12 hours as to how well both the Brexit and China trade deal negotiations are going.

Then, of course, there’s been the incessant algo-baiting, with VIX again threatening to abdicate its breakout.There’s an old saying that says “buy the rumor, sell the news.” There’s another admittedly less well-known one that says “fade important Fib and channel tags, especially when there’s an obvious rising wedge in the midst of a short-squeeze.”Will this be one of those times when one should sell the rumor?

continued for members…

SPX will top the .618 target on the open, perhaps reach the .707.  But, at this level, ES will reach the Fib extension target (2975) which sets up a return to the .886 on the downside.

Furthermore, ZN is signaling a bottom — meaning a top for stocks.And, USDJPY has reached overhead resistance — a potential triple top.

VIX has delved back into the flag pattern before and ended up breaking out.  There’s nothing in the chart itself which says it will happen again.  But, that’s certainly what the analog suggests. The naked SPX chart looks very bullish, with a breakout above all that moving average overhead resistance and the SMA20 — which has presided over several downturns in the past.  In fact, if SPX is able to hold above it, the suggestion is that the worst is over.

But, note that the SMA200 has now risen above the latest low — meaning that it can be safely tagged without registering a lower low.It won’t be long until the SMA200 reaches the neckline of SPX’s and ES’ larger H&S Patterns.I think CL and RB are probably done, even with the Iranian tanker mishap.  A “skinny deal” won’t change the need to keep inflation low enough to encourage dovish Fed policy.

VIX has pushed below its SMA200 five times in the past month or so.  It closed below it three of those times.  Each time, it rebounded and SPX experienced significant declines.  In the process, it has set up a sizeable potential IH&S. I’m going to work for the next hour in reviewing where things stand with the analog.  I’ll be back then.