SPX tagged our target at the 2.24 Fib extension yesterday — the 16th time it has touched this important level since the beginning of the year.

For now, the Fib remains support.  The moment SPX drops through it, it becomes overhead resistance.  And, with the SMA200 now only 38 points below it, potential drops aren’t as scary as they were in February when it was 170 points below.

VIX spiked to within a few pennies of our upside target where it met reasonable resistance. And, the Nikkei and the Dow backtested their SMA200s yesterday, suggesting the stars will align to support stocks through the end of the month/quarter.

But, what about oil and (especially) gas, which are still exerting upward pressure on CPI?  Can their latest breakouts hold, or will they fail and drag stocks back into the red for the year?

continued for members…

The line in the sand for RB:

CL is holding its highs so far — but, still a channel line backtest and well above where 2% CPI would dictate.

Currencies are back in supportive mode.  The dollar is holding the channel top.  USDJPY is still holding its fan line and is worth a shot at a long position here – at least for the rest of the week.But, note prices continue to inch higher.

Gold tagged our next downside target, where it should get decent support.  If the gray channel doesn’t hold, its next downside targets are 1235, 1207 and 1172.I suspect equities will try to hold the line through week’s end.  But, the downside targets are pretty well defined if they don’t – particularly for ES/SPX. UPDATE: 12:34 PM

Oil and gas just got a big boost from the news flash that Iran would be contributing nothing to OPEC output under the US “embargo.”  It is nonsensical from the standpoint that Trump, who is applying the pressure on Iran, is also the one complaining the loudest about prices being too high.  I see this as a typical pre-API/EIA ramp job — though I could be wrong.  Needless to say, there is much pressure to keep stocks elevated going into the quarter end – and RB/CL is a big part of that, particularly if VIX can’t find its way back inside the channel it broke out of and is currently backtesting. The other potential savior, of course, is USDJPY – which has gone sideways for the past two days and held the fan line. Taking off for some meetings, now.  GLTA.