Most of the rallies since our top call on Apr 30 have been followed by sharp sell-offs during the after-hours.  This obviously makes it very difficult for trend followers who don’t trade in futures. But, it also smacks of insider/specialist positioning — sucking in those playing a rebound who are then stuck the following morning or the Monday following OPEX in a losing position. It reminds me of that great scene in Trading Places where Louis Winthorpe III (Dan Akroyd) and Billy Ray Valentine (Eddie Murphy) snooker the Duke brothers in the orange juice pit.

While yesterday’s action was apparently a headfake, it remains to be seen whether or not it represented a meaningful breakout.  Again, it’s doubly hard to tell on OPEX.

continued for members…

Note that ES is back below the broken white channel it backtested, but has a long way to go before reaching the SMA200.  Can it get there?

SPX should gap down well below the SMA10 and SMA50 on the open, with about 82 more points to go before reaching its SMA200. VIX, which closed below the white channel bottom, is not back on top – but has backtested the SMA200.  So, it’s still very unclear. Remember, AAPL backtested its .786 channel line and SMA200 — bearish.And, COMP’s SMA100 and SMA200 should cross on Monday, presenting a very tempting downside target at 7533ish — a 4.2% drop from current levels and 7.9% off its recent highs.A close-up:

The currency picture still supports a pullback, with USDJPY still slipping lower.Oil and gas are still elevated.  CL hasn’t broken out of its small purple channel, so it’s suggesting the possibility of a pullback.  But, the harmonic picture suggests the Point D up at the .886 (65.85.)

RB has finally poked into the May 2018 range highlighted – but it still hasn’t backtested its white midline.  Remember, its backtest of the yellow channel top is technically bullish.Last, the bond market is still bearish — though the 2s10s has flattened again, which can calm equity markets.

Looking at ES’ closeup, my expectation is that it will settle toward the red target – the H&S neckline at 2800ish – on Monday.  A quick intraday dip to the SMA200 wouldn’t do that much damage.

In order to get there, it is likely to get a bounce at the purple TL (2834ish) — making it look like it’s simply backtesting the white channel (seemingly bullish) from which it broke out.

Obviously, it could continue falling at that point and re-enter the white channel.  If VIX pushes above its SMA200 at 16.77, it would help.

More later.