Keep a close eye on VIX, which has been humming “Should I Stay or Should I Go” for the past week. The algos are laser focused on this factor above all others, as it will determine whether or not stocks have additional upside potential in the near term.

continued for members…

This morning’s gap lower to 14.9 came close to Friday’s 14.84 before bouncing very slightly. Stocks could go either way, with appealing upside and downside targets. CL and RB are both in nosebleed territory, with a reversal already underway in RB. And the USDJPY already reversed, but is putting in a sympathetic bounce this morning.

On the bond front, the 10Y appears to be backtesting the recent flag pattern breakout, reinforcing a pause/reversal in CL… …while GC and SI are both backing off their backtest rallies. Last, BTC continues to reverse modestly after reaching its channel top.UPDATE:  1:00 PM

It’s hard to overstate how critical this juncture is. Note that SPX’s RSI is testing a TL that goes back to Sep 2020.

And VIX’s has recovered from a drop below a TL from May 2021 and testing the TL from Nov 2020 that it dropped below on Oct 14 (SPX’s channel breakout.)