Good evening traders. I am sorry to see the ASX had a rough day....

Good evening traders.  I am sorry to see the ASX had a rough day.

Friday’s close left the S&P 500 perched just below the 30 sma and between the 50% and 61.8% retrace of a rally leg that lasted some 18 trading days and ended with wanton debauchery on Friday, 26 January.

Consensus ta offers that a breach and close below the 61.8% retrace of that rally – around 2750 on the SPX – may clear the way for a bearish assault on the August based trend-line that runs near the 2700 are – this would also put the 50 day moving average in play.

Options open interest profile: Note that there is major put support at SPY 270.00 for Wednesday’s expiration.

Traders will be observing the VIX futures on Monday morning.  On cash open, they will turn their attention to the opening breadth indicators and VIX to ascertain the likelihood of a bounce - the NYSE breadth indicators were pinned so low on Friday that it would seem appropriately reflexive.

Right now, I am observing the ZNH18 10 year Treasury futures.  A small bounce overnight leaves them at + .19% as of this note.  The February VX contract is up 3% and if the cash market were to open right now, the VIX handle would be 18.37 or nearly +6.24%.

Last week, I noticed an almost mechanical inverse synchronicity between the S&P and 10 year Treasury futures.  It is not unlike the synchronous behavior of S&P vis Crude Light futures during the volatile stages of 2016.  It was amazingly precise.  I’ll leave any conjecture to your imaginations.

ESH18 S&P futures made an overnight low of 2733 on the first hour’s trade and then bounced near that level again two hours ago.  ES is about 2747 with a half hour to go before the cash open.