Futures are up 10 points overnight, but are still well within the 42-pt range set over the past two days following the latest breakdown.We have a pretty plausible case for considerable additional downside.  But, as we all know, holiday weekends are infamous for pattern-busting breakouts.

VIX, perched on the line in the sand between a rally and a plunge, has a clear path to levels which would practically guarantee a sharp rebound.  But, that has been the case the past few days, when rising channels broke down across the board.  Hence, our fascination with the downside case for equities.Throw in the fact that CL and RB remain overly elevated (and, also on a precipice of their own), our yield curve model is still bearish, TNX and DXY have much further to drop, and it’s hard to feel bullish at all.Then, there’s this canary in the coal mine.  DB has fallen an additional 15% since our last look [see: What is Deutsche Bank Trying to Tell Us?]  It has another 10% to go before reaching our 12.30 target.

That would be a total 39% drop from its December highs.  As one of the biggest banks in the world, with $50-60 trillion in derivatives, should we be alarmed?

continued for members…

I’m still working on my oil and gas model, but I’m looking for a drop to at least the purple channel top and potentially to the white channel bottom for CL.  It would certainly facilitate a sharp drop by Apr 6.

Note that USDJPY’s stick save stopped at a falling flag high, and seems to be reversing again.

TNX continues to fall ever so gently.  A soft landing at the purple TL would be a non-event.  While a drop to the red line would be more traumatic.

The dollar continues to be propped up.

The yield curve has further to go.

The detailed charts for ES and SPX show support at the purple .886s, the former lows, and then the purple midlines at about 2460. Keep an eye on VIX, today, as a move back to or through the channel bottom is probably all the signal we need.  Just keep in mind that it has a long and distinguished history as a head fake.

I have a meeting coming up, and then a lot of charting to do.  I’ll pop back in later in the day.

GLTA.