Had the disappointing OPEC summit results been announced during market hours yesterday, we might not have seen a 2.8% ramp in WTI futures from Tuesday’s lows.  Together with the ongoing meltdown in VIX, this was enough to push S&P500 futures to new all-time highs.But timing, as they say, is everything.  With a 7-pt ramp in the bag, it was safe to spill the “news” that there’s very little OPEC can do to improve the price pressure imposed by the current oversupply of oil in the world.

USDJPY and VIX were quite capable of handling the propping duties for the rest of the night.  And, CL is making a strong bid to recover, just in case.  But, there are other factors at work in the oil complex — a chart pattern that doesn’t bode well for CL or for equities.

continued for members…

CL and RB are at the top of long-term channels that should put an end to any further escapades. It won’t matter in terms of this morning’s breakout.  ES and SPX will follow suit — but, after new all-time highs.But, it could mean that CL won’t be much more help in the near future. If that’s the case, it’ll be up to VIX making new all-time lows, or USDJPY’s breakout turning into something more impressive than it has been so far. UPDATE:  9:35 AM

Look for the new highs to fizzle and drop, potentially, back to the rising SMAs at the very least.  If they’re smart, they’ll wait until the SMA5 10 or 20 has cleared 2405.77.CL has backtested the SMA100, a natural stopping point (if it’s meant to stop today.)If it pushes back above the SMA100, good luck getting any downside out of SPX.  So, I’d be happy in cash here, and would look for opportunities to short on a drop through 2405.77 if CL reverses hard off 51.11 or USDJPY breaks down.  Otherwise, it looks to be another day of melting up.

I pulled an all-nighter last night, and haven’t the patience for watching another meltup.  So, I’m going to sign off and work on updating the oil forecast.  I can say at this point that I expect a reversal here — just not sure when and how much.  The SMA100 is obviously an important pivot point.  I’d want to be short as long as CL is below it.

More later.

UPDATE:  9:59 AM

Quick update on SPX, which has reached the bottom of a small reversal zone.  If CL reverses here, as it looks like it will, SPX could be good for at least a 7 point drop.  I’d try shorting with very tight stops – SPX for a drop to 2400 or 2390 and CL for something much bigger (but on the lookout for any move back above 51.11.) UPDATE:  11:51 AM

CL is coming up on its next level of support at about 49.46.  It will have to overshoot the SMA200 slightly, so we’ll have to wait and see. UPDATE:  11:56 AM

CL should bounce here, with likely targets being 49.91, 50.25 and 50.83.  If it doesn’t, however, the next support isn’t until 48.76 and, potentially, 43.If/when it bounces much, it’ll likely be when SPX is done backtesting whatever it is they want it to backtest — probably the 2405.77 high or one of the channel tops passing through the vicinity.

Of course, it’s going to be tough to convince SPX to sell off much unless VIX breaks out.UPDATE:  12:12 PM

CL just dropped through to our next downside target at 48.76.  Same drill as before.  It should bounce, but if not, 48.61, 48.46, 47.58 and ultimately 43.  VIX still hasn’t budged, so SPX is barely moving. UPDATE:  12:34 PM

CL has rebounded to backtest the yellow midline and the SMA5 10.  Ideally, it would reverse here and make new lows at 48.62 and then 48.35.  VIX has still not budged, refuses to play along — so, SPX mostly unaffected.UPDATE:  1:39 PM

I think I see where they’re going with this…  SMA5 200 crosses 2405.77 about the same time VIX finishes breaking out and CL bottoms? UPDATE:  3:04 PM

An hour left and it could honestly break either way.  The price action says the 1.272 at 2420.20.  But, we’ve seen plenty of head fakes in these circumstances, and the door to 2405.77 is still wide open.  It’s just highly unlikely to happen — no matter how much CL tanks — unless VIX gives its permission.  CL is heading for our last decent support.  Below this is teh 46.60ish and then, 43-44.  Ouch.  Maybe it’s time for USDJPY to get in on the action? I have to run out for an hour or so, and will miss the exciting close.