More excitement out of the Oval Office this morning, as our Stable Genius in Chief’s tweets suggest the pressure might be getting to be too much.

First came the tweet threatening an actual shooting war with Russia……which was quickly followed by a tweet extending an olive branch.

Was the addition of a question mark at the end of “Stop the arms race?” supposed to diffuse the irony of such a statement being uttered by the guy who recently increased defense spending by $54 billion?

And, maybe someone should explain to him that “good cop-bad cop” doesn’t really work if the cops are both the same person.

Not amused, S&P futures were off 40 points — backtesting the SMA10 before enjoying a slight bounce.  The momentum that has built over the past two days has been damaged, if not broken.

The reversal came at an inopportune time, as both SPX and ES were nearing completion of bullish IH&S Patterns.  The proximity of the buy signal, as is so often the case, was also a signal for caution.  As we discussed yesterday when posting a sell signal at SPX 2662.20:

In many instances in the past, IH&S Patterns have failed at about 10 points below the neckline.  The first I can recall happened in 2011 [see: Ten Lousy Points.]  That’s where SPX is, now.  If the plan is still to afford COMP an opportunity to tag its SMA200 (which is now heading lower) then this would be the time for SPX to run out of steam.

The most telling chart, this morning, is USDJPY — which has broken trend line support after a picture perfect bullish backtest on Monday.It’s distressing to think that the future not only of the market but the world rests in the hands of an individual who struggles to communicate a reasoned and consistent position.

continued for members…

VIX continues to be the difference maker in the markets — playing cat and mouse with its SMA10 over the past few sessions.  While it has yet to break out, it has also resisted all efforts to drop below 20.  I assume there is a reason for this.  And, I assume it’s because COMP is still a candidate for a SMA200 tag.

At present, SPX looks likely to test a channel line at around 2631-2635.But, if TSHTF, we still have a C=A target of 2461.72.  The chart below illustrates how this could easily have occurred had we not seen the multiple interventions around the SMA200.The path to 2138 remains intact.COMP’s SMA200 is nearing the level at which a tag wouldn’t result in a lower low.  This is probably the objective.