The Dow serves as a pretty good barometer of the seriousness with which our political leaders have treated the COVID-19 crisis.  As it has approached the 2016 election levels, there has been a discernible shift in the tone of comments and measures undertaken by the president, congress and the Fed.  Here are just a few comments/actions which have come out of the White House and Fed over the past month.As DJI tagged our 18974 target, we started looking for a bounce. We’ve seen the early stages of one forming, especially in ES. We’ve even seen some managers brazenly declare that this is a real buying opportunity. But, we’ve been down this road before.  Can the bounce last?

continued for members…VIX has broken down, but will it stay there after the open? A pop above 89.53 could spell the end for SPX/ES’s yellow channel.

The first test is whether VIX can drop to or through its SMA10. So far so good. But, with a weekend coming up and much bigger case and death data coming out, what about Monday?

We’ll take a look at different time frames for ES and SPX:

ES has broken above some minor TLs, but the bigger ones are way up around 2750.

As long as it remains above the yellow channel bottom at 2350, a meaningful bounce has a chance. SPX’s falling red channel should be easier to crack… And, like ES, it remains above its yellow channel bottom. Oil and gas remain in bounce mode, but there’s only so much they can do given that everybody and their uncle now expects a recession.

CL has tried pushing above its former 26.05 lows, but has failed twice so far. Its SMA10 is approaching, now at 29.07. A push above it would help the bulls immeasurably.

The 2Y is sliding lower, and should continue to as long as the Fed is on the case.These keeps the pressure on 2s10s… …especially if the 10Y continues to test overhead resistance.

Currencies remain a wild card.  While EURUSD is coming off yesterday’s lows, it still has downside potential to its .886.  If it doesn’t bounce back, it could even be heading down to the yellow channel bottomAnd, USDJPY is still thinking about a higher high. Stands to reason there is some arm twisting going on between Washington and Tokyo. Both will serve to keep DXY on the rise, which lately has been supportive of stocks.Note that at the former high at 103.82, DXY is just shy of the rising white channel top.Gold continues to hang in there, but is definitely struggling against the surging dollar.

UPDATE:  10:00 AM

So far, so good. Of course, if ES’ rising white channel fails, there’s a backup. It could drop to 2316 at the close and still have a fighting chance after weekend manipulation.UPDATE:  3:00 PM

Bottom of the alternate channel officially tagged.  Time to take a stand if it’s going to… UPDATE: EOD

Not a very positive close.  About the only positive sign is that VIX closed above its SMA10, but that’s not much to hang your hat on with some ugly news ahead over the weekend. Anyone else exhausted? I’ll have more to post over the weekend. But, for now, I’m going to shut down my computers and go for a walk before we’re all quarantined.

Wishing everyone a healthy and happy weekend…