We would almost always expect a big bounce off SPX’s 200-day moving average. Despite yesterday’s dip below the 200-DMA, the index dutifully crept back above it in time for the close.  And, the futures are currently showing an 8-point gain.Yet, if an analog I’ve been watching and our yield curve model are correct, this bounce won’t last. Stocks could be sharply lower by Monday.

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The yield curve model remains in bearish mode.While both the 2Y and 10Y remain broken down.

Monday Jun 3 is indicated as an important low. Interestingly, this aligns with a few charts where major moves should complete on or about Jun 3.

The first is ZN, which shows a potential intersection at 127.82 on Jun 3 if it is able to break out from the white channel.  It also shows an interesting intersection at 130.64 in late-August or early September.TNX disagrees, signaling the next major tag of the .886 at 21.72 could come in mid-June.VIX’s 30.24 target — the red .786 and white channel top — also occurs around Jun 3.

AAPL’s midline and .618 tag would be around Jun 3. And, COMP’s .618 and channel line backtest at 7391 occurs around Jun 3. The above would imply that SPX drops to 2722 or even 2703 on Monday.  As discussed yesterday, there is a major disagreement between ES and SPX’s 2.24. So, things could definitely get tricky in terms of where to look for bounces.

In the meantime, SPX has a gap to close at 2778.45 and a potential backtest of the red neckline at 2807ish.

CL is holding the line this morning, while RB appears poised to drop to our 1.75-1.76 target. Last, USDJPY still appears to have more downside even as EURUSD and DXY continue sideways.