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The futures tumbled overnight on unscripted weakening economic data, particularly in China.  ES tagged our H&S neckline a second time before getting a nice 12-pt bounce courtesy of CL (which broke out of a completed H&S)…….as well as USDJPY and VIX, which tagged our next downside target yesterday.

continued for members…VIX is still playing its cards close to the vest, with the potential for large moves in either direction.  The question remains whether stocks will be supported through the end of the year. Remember, the 2017 close was 2673.61, less than 2% above current prices.  Our upside targets of 2703.62 and the SMA200 at 2759.66 would deliver a “win” for the year without producing a breakout.

The 20-pt decline in ES leaves SPX, which closed on a bearish note yesterday, safely tucked into its falling white channel, though still close enough to a breakout that one should keep their guard up.Our early warning signal is SPX’s neckline at around 2613 (ES 2614ish.) The DXY got a nice boost off better than expected retail sales and is closing in on our 97.873 target.This, as EURUSD tests the channel top yet again……and USDJPY pushes toward our 113.84 target. CL continues to show downside potential (following the current bounce)……and, RB should continue to go sideways, with no additional downside anticipated. Last, COMP continues to look awful – though there’s a good chance it will wait until after YE in order to limit the damage to the .886 at 6801.75. Much will depend on AAPL, which might have trouble delaying its plunge to 144.48.Members, remember today is the last day for our membership subscription special.  Upgrade to an annual membership for $750, less than the cost of five months at the monthly rate.  Just email us or drop us a line and we’ll invoice you via Square.  If you ask nicely, we’ll even apply your most recent monthly payment.

UPDATE:  11:53 AM

SPX and ES just pushed down to their necklines.  We’ll either get a rescue here or SPX will continue on to test 2579.23.  You know the drill, a break of 2579.23 opens up 2420-2450. I’d watch VIX for clues.  It hasn’t broken out yet, but is clearly on the verge.  Remember, the big breakout would come at 25.50.  So, it’s entirely possible we get another test of that resistance.