Actually, it’s the 5th test in the past 10 sessions of this internal trend line that, by all rights, shouldn’t be very important.  If the market weren’t so fragile, I’m sure we would have seen new highs somewhere along the way.

Even with VIX hammered by 35% since the Aug 5 lows, however, ES has continued to struggle with this trend line — which makes it a very important test.

Our analog suggests is will hold one last time before Jackson Hole silliness grips the market over the next few days.  Stay tuned.

continued for members…

At the current levels indicated, SPX will test the top of its falling white channel – important resistance for it. VIX has bounced off the top of the red channel a few times — today, not so much.CL and RB are contributing to the bounce, with CL pushing above its SMA200 and RB testing its. USDJPY continues to go sideways, poised for the next downturn.Some members might have noticed that ES’ rebound to the red TL (neckline) completes an IH&S pattern that would target new all-time highs on ES and SPX.So, this TL/neckline is extremely important.  Not that a completion of the pattern guarantees to rise to new highs.  But, a dip back below 2817 would bust the IH&S and allow for a push into the end of the month to 3004 or so in keeping with our analog.

UPDATE:  1:00 PM

ES continues its undecided ways about breaking out.  CL and RB are in the perfect position to slam stocks lower, with easily breakable TLs and SMA200s that refused to yield. But, VIX continues to slump, showing no sign of rebounding yet.This leaves ES making lower highs in a rising channel…

…and SPX seemingly ready to break out but without any impetus. Bottom line…seems like another delaying tactic that will result in a further drop.  But, the charts could be interpreted either way.  If not for the analog, I wouldn’t be too sure either way.

UPDATE:  2:10 PM

Reading through the FOMC minutes now:  https://www.federalreserve.gov/monetarypolicy/fomcminutes20190731.htm

ES’ initial reaction was not positive, as members saw the July cut as a mid-cycle adjustment and not the beginning of an extended rate cut regimen.

More shortly.

UPDATE:  3:45 PM

Totally not worth reading through the whole thing!  Looks like we’ll get a drop down to the SMA5 200 at the close……perhaps enough to get VIX back above the red channel top.  My gut tells me we’ll get downside follow through tomorrow.  DXY has not broken out……and USDJPY still looks vulnerable.

I see nothing in the minutes to reinforce the notion of more dovishness — which is what the market was looking for.  The 2s10s is contracting once again — which means the bond market isn’t impressed with the FOMC prognosis.