SPX is in a perfect bull-trap formation. The rally may be over, but the hope for a settlement is high. This has many traders and investors still comfortable being long.

But the splinter is getting wider and the fragmentation of views combined with the refusal to negotiate may be a toxic mix.

David Tepper weighed in on CNBC with the view (reassurance?) that tapering won’t happen for a long time and the markets will continue to go higher.

Soothing words.

VIX may be signaling that the bottom may be in. There is no breakout yet, so we must wait for that confirmation. In the meantime, VIX may test its mid-Cycle support for reassurance before going higher.

TNX hasn’t broken out yet. It has matched its prior high. It appears that a breakout may allow TNX to surge above its resistances, removing the barriers to a ramp back to 30.00 and higher.

UUP/USD broke above a Head & Shoulders neckline this morning, giving UUP a new target above all its major resistances. USD also broke out above a Head & Shoulders neckline, proposing a quick rise above its mid-Cycle resistance at 81.97. USD futures are currently at 809.73 and rising.

Gold has held steady today, so not much to report there.

XEU has had a breakdown this morning, as well. There may be a retest of hourly mid-Cycle resistance at 135.40 before moving further, but the trading bands suggest a large moving is in the wings.

Regards,

Tony

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