Just about everybody seems surprised, this morning.  Those who were rooting for Clinton are, of course, surprised that their candidate lost.  Those who were rooting for Trump are surprised that the election wasn’t more effectively rigged.  Those who didn’t vote are, no doubt, surprised that their vote might have mattered after all.

The one thing there should be no surprise about is the degree to which the “market” was managed.  As we discussed on Monday in The Wheel’s Spinning:

For the record, I consider it extremely presumptuous that the election risk is over and done with.  To repeat what I mentioned earlier, we saw the exact same thing happen with Brexit.  Knowing the downside risk, TPTB ran equities as high as they possibly could before the vote.  The subsequent downturn, thus, started from a much higher level.

Monday and Tuesday were, obviously, an echo of the Brexit runup — with a runup that barely paused along the way to a 64-pt gain from Friday’s lows.It’s not such a big deal to lose 50-100 points if it’s from 64 points higher in the first place.  And, that’s exactly what we’re seeing this morning — except that TPTB learned another lesson from Brexit.  The damage control has been so effective overnight that the futures have already bounced 73 points off their overnight lows.

One tool, VIX, is lower in the face of what is still a 25-pt drop in the S&P 500 futures.  As futures were plunging last night, VIX put in a preposterous 26% decline!The world has changed.  Investors will care.  The question is whether VIX and the other tools central banks have at their disposal will be enough to prevent serious fallout as they did with Brexit.

With that in mind, we’ll take a look at the prospects of our downside targets playing out.

continued for members…

VIX is back below the falling red TL that was used to prop up stocks the past two days — and has the SMA200 yet to tag down at 15.68. DX backtested the purple TL and almost the SMA200.  Like VIX, it should have another leg down left in it. CL put in its SMA200 tag overnight and is back to almost even on the day.And, USDJPY came very close to tagging the bottom of the rising white channel.

Even NKD, the ultimate manipulation bellwether, is back above trend as though nothing at all happened.

Our SPX targets remain in place, though the current intervention makes even 2068.92 — which has been my favorite target — look like a stretch.  Bottom line, be short, but watch for the inevitable reversal if the intervention gets to be too powerful.

UPDATE:  9:33 AM

Unless they’re going to try to sell us the idea that Trump’s election is good for the “market”, this is as good a short entry as we’re likely to get.  Shorting here at 2140.15 as VIX has tagged its SMA200 and white channel bottom.  Initial target is 2123, followed by 2118, 2092 and 2085.63.  I’d have fairly loose stops on this position.

UPDATE:  9:50 AM

Can ES bounce enough to actually break out of its falling channel?  That would really be something…  Watch your stops!