As expected, VIX is leading algos by the nose into another pre-opening ramp job on OPEX. Note the timely drop through the red TL, the yellow TL and, for good measure, the 200-DMA. Meanwhile FAANG member and COVID-19 darling NFLX did reverse at its channel top (the white dot below) as we expected [see: FAANG Update.]  It came within 5 points of our 444 target before bouncing. Keep an eye on it, as there’s much more downside if this support doesn’t hold.continued for members…

ES’ .886 looms up ahead if ES can break above the red channel top.The SPX version:

Broken record, I know, but USDJPY is still backtesting (but, so far, unable to retake its SMA10)……as EURUSD threatens to break out and DXY threatens to break down.

Although CL got a bounce off its SMA10, it has still broken down.

Interestingly, RB finally joined it in breaking below its TL and SMA10.Just as a reminder, or for anyone who hasn’t been on the site this past week, I’m looking at this as the last hurrah before a meaningful downturn. ES and SPX have retraced their February highs to very nearly their .886s (could still get there, I suppose) and the next move should be a very substantial drop.

The only way I see it not happening is if VIX is hammered to below its SMA200 to or below its .886 at 19.86.

As we get closer to election day, I want to remind members that we will likely see increasingly desperate moves in both parties to curry favor with voters. This means, of course, that we could see many more bailout type maneuvers in the months ahead, any of which has the potential to goose the economy, or at least the market – which is one of Trump’s few remaining strengths when it comes to polling.

I continue to believe there’s a very good chance that Trump will resign prior to the election if his numbers don’t improve. I suspect it will be blamed on health problems (real or delusive) and leave Pence in a position to both pardon Trump and have a fighting chance at winning the presidential election. If the GOP plays its cards right, they might even retain the Senate.

To repeat, this scenario only makes sense if Trump’s numbers don’t improve substantially over the next couple of months.

More later.

UPDATE:  2:45 PM

Nothing much happening here, so I’m going to get an early start on my weekend.  I wish everybody a good one.