The best part of being a chartist is discovering a pattern that promises a big move and then seeing that move play out.  The worst part of being a chartist is waiting for the move to play out.  These days, those waits can last forever.  But, they’re worth it.

A case in point is the 10Y, which came within 3bps of our next downside target earlier this week……or the e-minis — which nailed our interim downside target on May 31.  Since then, we’ve been waiting for the next shoe to drop.  The sharp bounce in equities over the past two days has tested the patience of those of us looking for much more downside.

continued for members…

VIX hasn’t broken down yet, so the plunge in equities is still alive. Unless my charts are lying to me, the next stop should be 30.24.ZN suggests two stages – a sharp crack tomorrow or Monday followed by a larger move which could take as long as August.  But, it has already broken out of one channel; it could do it again — meaning the next leg could come sooner.

This deserves its own post, but our yield curve model is breaking out – potentially worse than breaking down.  I’ll explain later.RB’s channel remains broken down and the white midline at the .618 remains our primary target – though it’s fallen very far quite fast.  So, don’t be surprised if we get a bounce here that delays the drop until channel lines catch up with it in August or September. CL reached and slightly overshot our .618 target, so there’s a good chance of a drop to the purple midline or .707 Fib if the .618 fails to hold.EURUSD finally tagged the channel top and might take a crack at its SMA200.While, DXY is on its way to its own SMA200 and, if it doesn’t hold, the red TL.USDJPY is closing in on its .618.Take all the above into account, and I’m still looking for SPX’s H&S to complete at 2703, followed by the red H&S target at 2659 and the .618/1.618 at 2578.Like everything else, COMP had a nice bounce yesterday — notable in that it didn’t break out of the falling red channel.Both AAPL and BA came up a little short of our targets and could dip slightly lower on a backtest in the next slump.  Otherwise, the SMA200s are excellent upside targets.  Keep an eye on VIX.UPDATE: 3:50 PM

Another 20-pt meltup, and it’s not even OPEX.  This is the highest point to which SPX can go without it being an obvious breakout (lasting or not.)  If we erase the smaller purple channel, we can see that SPX is now pushing up against the intersection of the much bigger falling purple channel and the midline of the rising white channel – an obvious reversal point.   All we need now is VIX to hold and for some of the rate cut mania to subside (I seriously doubt we’ll get on in June.)