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CL nailed yesterday’s downside target and is getting a bounce, which is enough to trick the futures into a 5-pt gain just ahead of the open. The questions are how big the backtest will be, and how long it will last.  We remain short from 2139.23 on Oct 27 [see: Distress Call] and yesterday’s downside targets remain unchanged.

continued for members…

With the elections only a week away, and Clinton’s lead fizzling, it will take some careful guidance to keep SPX out of the red.

USDJPY is backing off its .886, likely wanting to wait until a bullish spurt is needed.

ES is backtesting its H&S neckline, with the exact same downside targets as before.Likewise for SPX.Anyone remember DB?UPDATE:  2:15 PM

Just slipped below our next downside target at 2103, and seems to have some momentum going.  I’d hold short for now, but watch out for a bounce.  The next downside target is 2089.96.UPDATE:  2:29 PM

Back to the red target, and VIX is retreating. I’d cover the short here at 2102.37, and only go short again if it drops back through.  I still like the 2089 target, but it could be delayed until later today or even tomorrow morning.  I have to step out for 30 minutes, will check back then.UPDATE:  3:00 PM

DB should get a bounce here.  If it fails, more downside pressure for stocks.

EOD

Not a bad start on our forecast from over two weeks ago [see: More Trouble for Mr Market.]  And, a decent first day of the month at +1.7%.  It was a strong bounce into the close.  With the BoJ noodling over next moves, there is definitely a great deal of uncertainty.  But, I still feel comfortable with our 2089 target and reasonably good about the 2068 target.