SPX broke out to a new high, yesterday, prompted by a last-minute breakdown in VIX that sent algos scurrying.It had all the integrity of a dog-faced pony soldier, but it counted all the same. Now, as the market is about to open this morning, we’re seeing repeated plunges in VIX – just enough to remind carbon-based investors that there’s more where that came from.

continued for members…

This does real damage to the potential for a breakout in VIX.

It has enabled ES to experience a bullish 10/20 cross……which would push ES above the yellow channel line below……and allow ES to follow the red channel higher.

SPX is in a position to emulate it by the close. Note that it already ran into a backtest of its broken red channel and the white midline. It should have been enough for a reversal…CL is in a position to give it a boost by simply popping out of the falling purple channel. It’s very close.

Note that USDJPY is similarly positioned. All it needs is a little bounce rather than a breakdown thru the purple TL. EURUSD got very close to our next downside target. …which, if USDJPY cooperates, might auger a reversal for DXY here at the .786.The bond market is still bearishly aligned – though the 2Y pushed back just above 1.4%.

The big picture is very blurry right now. Stocks’ new highs don’t mean a whole lot, as it’s obvious they are being manipulated higher.

My gut tells me that the coronavirus is much worse than publicly acknowledged. If/when that information comes public from a reliable enough source, things could collapse very quickly.

UPDATE:  2:25 PM

ES/SPX are pulling back from this morning’s highs… …with USDJPY, VIX and CL signaling that it’s perhaps intentional.  Each of them had an opportunity to produce big gains for stocks, but are pulling their punches. Even RB is hinting at a minor breakdown. I wouldn’t be surprised if ES falls to test the 1.618 at 3336.50 again.  Though SPX would close its gap at 3352.26.  Keep an eye on this TL for ES……and the 2Y, which has been back and forth across the 1.40 line.