S&P 500 futures have bounced 77 points off their 50-DMA overnight lows, a substantial sum but not yet enough to break out of ES’ falling wedge which would be tested at 3380-3385.

It raises the question: is this a garden variety pause or is the excitement over?

continued for members…

While ES is working on a falling wedge…

…SPX looks more like a falling channel until it breaches 3389ish. COMP also tested its SMA50.No surprise, but VIX is starting to break down below a TL/channel bottom which would likely yield a test of the SMA100 and SMA200. Currrencies are somewhat neutral, with USDJPY’s bearish 10/20 cross and EURUSD’s rising white channel both hanging by a thread.(I’ve experimented with two different falling channels over the past few months, but am going with just the purple one for now for ease of viewing.) This leaves DXY in a bearish alignment for the time being, though the risk of a breakout to backtest shouldn’t be disregarded.10Y yields are up slightly overnight, but still look likely to drop from my vantage point.

Oil and gas are both bouncing off channel support. It’s not unusual to see a ramp going into the EIA inventory report (scheduled for tomorrow due to the holiday.) But, with additional COVID-related shutdowns around the world, the Saudis cutting official prices, and the end of the summer driving season all hitting at once, I don’t see much cause for a lasting bounce. Aside from VIX manipulation, I see little reason for stocks to bounce out of the funk they’ve been in for the past few days. A bipartisan deal on stimulus seems as unlikely as ever.

UPDATE:  11:12 AM

ES and SPX have pushed slightly above resistance, momentarily nudging above their February highs.

VIX has done most of the heavy lifting, though it has backtested a TL of support as well as its SMA200, so it might be about done.

CL and RB are still up from yesterday’s lows, but it feels like a sick cat bounce more than anything.And, USDJPY hasn’t really gone anywhere since pushing above its SMA10 and SMA20. This maneuver has consistently resulted in lower highs since Sep 3.UPDATE:  3:55 PM

FWIW, ES and SPX have stopped just shy of their SMA20s and VIX is poking back above its SMA200. The suggestion is a continuation of the downturn, though this is hardly assured.

USDJPY’s “breakout” is fizzling… …and EURUSD’s rising white channel lives to fight another day. CL has backtested its .146, where it should reverse.