The algos are working overtime, this morning, employing the usual VIX breakdown and CL “breakout” to keep futures on the rise. We saw the bullish 10/20 cross in SPX and ES yesterday, so the technical picture has officially shifted. When it comes to this market, where there’s a will…there’s a way.

continued for members…

CL’s breakout……accompanied by RB… …and VIX’s breakdown.ES is following the yellow TL at the moment – which has put it back inside the rising red channel and broken above the yellow channel .786 line.  If it can hold above 3357, the bullish case is intact. The SPX version shows SPX butting up against its rising red channel — not having rejoined it just yet.

USDJPY is up against the red TL again……so a “breakout” would be a big deal and could easily keep stocks on the rise. DXY is at least taking a breather… …even though EURUSD still has more downside potential. The bond market is on the sidelines for the moment with the 2Y bouncing back above critical 1.40% support……and the 2s10s bearishly aligned but going sideways for the moment……as TNX is also bouncing. All in all, it’s a pretty typical day for a Powell testimony: ramp things higher and hope that he doesn’t step in it.

If you’re looking for signs of potential weakness, look no further than AAPL, whose RSI has still broken down……and RUT, which is testing its .886 again.  Unlike SPX, it never made new highs after Sep 2018. More later.

UPDATE: 3:55 PM

EURUSD just tagged our next downside target……as USDJPY reached our next upside target: the .886 and red TL. A breakout would be bullish, but it has previously reversed at this same TL 9 times in a row.If DXY reverses by a bunch, tomorrow could be a nice turning point.  The one proviso: VIX is collapsing big time. It could collapse another 10% tomorrow. There’s nothing in the SPX screaming reversal.  But, ES has reached the white channel midline which has touched off several previous reversals.  It has also reached the red channel .236 line which provided a reversal on Tuesday. FWIW, if it were to slide up to 3390, a .618 retracement would backtest the 1.618 at 3336.49.Last, CL has backtested the white channel bottom and red TL… …while RB is just plain ahead of itself.  Oil inventories rose sharply last week, which makes CL’s 3% rise even more suspect. Even though gas inventories fell slightly, they hardly justify a 5% increase in RB.  I know the coronavirus headlines were mostly positive today, but I suspect it’s time to revert to short for both.

Gamblers might wish to take a shot at shorting here.