While I'm waiting for Hostgator to undo the damage they did when they "upgraded" pebblewriter.com, here are the relevant charts for the day. I hope to be back on the main site by the end of the day.
The IH&S that ES completed yesterday failed overnight, but we’re still waiting to see whether the rising white channel bottom - currently 2487 - will hold.
With ES and SPX back above their SMA10s, the momentum has been with the bulls.
However, VIX has broken above the red TL from a week ago, giving the green light for lower prices.
CL is also probing lower, with the same effect.
And, as we discussed, USDJPY has dropped down to backtest its SMA200.
Bottom line, everything that VIX, USDJPY and CL have done so far have been bearish, but ES has not yet broken trend. If/when the rising white channel breaks down, we can say the trend has shifted. A drop back through the SMA10 (ES 2418 and SPX 2452) would be confirmation.
VIX is coming in for a backtest of its falling red TL - very important to what happens next.
UPDATE: 3:40 PM
ES pushed briefly above its neckline but has faltered. Odds are it'll close right at it or above, forcing traders with directional conviction to decide whether to assume the risk of holding short overnight. The alternative is a close at the SMA5 200 where it intersects the channel bottom (2515-2522) on the close.
CL is offering no help, testing the recent lows for a triple bottom.
USDJPY is melting down into the close, which has sent DXY below its SMA200 as well.
Although the 2s10s has dropped below 48 bps, check out the 2Y - back below the latest support and threatening a drop through the critical 22bps level. This does not bode well for a continuation of the bounce.
VIX is also not inspiring much confidence as we head into the close.
Bottom line, we're setting up for a very weak close and additional downside.
* * *
The IH&S that ES completed yesterday failed overnight, but we’re still waiting to see whether the rising white channel bottom - currently 2487 - will hold.
With ES and SPX back above their SMA10s, the momentum has been with the bulls.
However, VIX has broken above the red TL from a week ago, giving the green light for lower prices.
CL is also probing lower, with the same effect.
And, as we discussed, USDJPY has dropped down to backtest its SMA200.
Bottom line, everything that VIX, USDJPY and CL have done so far have been bearish, but ES has not yet broken trend. If/when the rising white channel breaks down, we can say the trend has shifted. A drop back through the SMA10 (ES 2418 and SPX 2452) would be confirmation.
* * *
UPDATE: 11:25 AM
CL is testing former lows and USDJPY has dropped through its SMA200. This has allowed SPX to find its channel bottom -- though ES has not quite reached its.
I suspect we'll see ES' white channel break down and the purple channel I just added take over very soon - something we call "channel tilting." Lately, of course, these sorts of things have been happening after-hours.
CL is testing former lows and USDJPY has dropped through its SMA200. This has allowed SPX to find its channel bottom -- though ES has not quite reached its.
I suspect we'll see ES' white channel break down and the purple channel I just added take over very soon - something we call "channel tilting." Lately, of course, these sorts of things have been happening after-hours.
UPDATE: 3:40 PM
ES pushed briefly above its neckline but has faltered. Odds are it'll close right at it or above, forcing traders with directional conviction to decide whether to assume the risk of holding short overnight. The alternative is a close at the SMA5 200 where it intersects the channel bottom (2515-2522) on the close.
CL is offering no help, testing the recent lows for a triple bottom.
USDJPY is melting down into the close, which has sent DXY below its SMA200 as well.
Although the 2s10s has dropped below 48 bps, check out the 2Y - back below the latest support and threatening a drop through the critical 22bps level. This does not bode well for a continuation of the bounce.
VIX is also not inspiring much confidence as we head into the close.
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