Futures are off 7 points as we approach the open……up about 10 points from the overnight lows that saw VIX gap back above its SMA100. While theoretically important, we often see these types of moves after hours — the sole purpose of which is to provide VIX an opportunity to break down the following morning.
Yesterday, SPX and ES both reached their H&S necklines and reversed, with ES’ rising wedge breaking down slightly. Strike one, but still at bat.
Our yield curve model is still signaling danger ahead. And, rates look likely to dip much further in the coming weeks.
But, tomorrow is OPEX and this is a three day weekend. We know from past experience that both of these events often result in gaps up over resistance. So, it remains important to exercise caution in committing to directional trades.
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