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Caution is the Word

Good day for Asia and Europe equities as China's Yuan news come to the fore. 

However, their ~2% rallies today seem more an over-reaction than the projected 5% appreciation of Yuan against the US$ in a year's time.  Tomorrow will decide whether they consider that an over-reaction rally and try to take profits as fast as possible then may over-react to the downside.

Caution is now in the winds with regards to the VIX and Euro$.

This was my VIX analysis 19 days ago:

-     img38.imagefra.me/img/img38/6/5/21/aarc/...

This is now VIX:

-     img40.imagefra.me/img/img40/8/6/21/aarc/...

VIX had served me well, most of the time, in understanding how SnP500 would perform on the daily basis since Aug/Sept 2009 when Spx started forming incomprehensible moves on the daily charts using Elliott Waves counting.

For now VIX was a 1-2-3-4-5 down on the weekly:

-   img37.imagefra.me/img/img37/8/6/21/aarc/...

Euro$ is also testing the major resistance on the weekly chart today:

-   img37.imagefra.me/img/img37/8/6/21/aarc/...

Euro$ went up very early this morning and DAX gapped up at the open.  However, the succeeding corrective run down for Euro$ on 15min chart was severe as it already is a potential 1-2-3-4-5 rally on the 24-hr 240min chart with 1.245 nominal target for the 5th.

ES and DAX are trying to de-couple from Euro$ early this morning with admirable if not partial success using the 24-hr 15min chart. 

How long and how far DAX and/or ES can de-couple from Euro$ remains a big question mark.  It is simply too early to know how they will perform as Euro$ got hampered by the weekly resistance and will need an A-B-C correction on the 24-hr 240min chart.

Couple that with the potential a-b-c up pullback for the VIX on the daily IF the run down is actually an a-b-c zigzag down to date. 

Then, we have two forces that may start working today or tomorrow against ES and Snp500 potential straight run toward the 1145/1148 resistance levels.

Addendum:

Major resistance for ES and/or SnP500 is also the daily 50ma near term.  That level also spells Caution in addition to VIX and Euro$. 

Let's see how the tapes will print at the open.   A bullish tape usually precedes potential follow-up rally for tomorrow toward the daily 50ma resistance (at least for ES and YM if not for Spx and Indu resply).