At 1.186 million, initial claims came in well below estimates of 1.46 million. Futures rallied on the news, but are still slightly in the red after breaking below trend overnight.
All eyes are on tomorrow’s nonfarm payroll data which Trump has already characterized as “big jobs numbers.” Will it be enough? At what point will the market run out of patience with Congress?
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ES has reached the top of the falling white channel we added a couple of months ago. At 76 points below all-time highs, a 2.2% move higher would make quite a statement about the integrity of the S&P 500 – essentially that a connection between equity prices and macroeconomic conditions is no longer a reality, nor even a consideration in investing. Imagine future FOMC press conferences and the derision that pretenses to the contrary would invite.
Is the Fed ready to cross the Rubicon? Or, could this finally be the end of the road?
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Aside from the higher highs which busted ES’ H&S Pattern yesterday, not much has changed. Congress and the Trump administration are still fiddling while America burns, failing to come up with a package that could keep millions of businesses and families from slipping into bankruptcy and foreclosure.
Futures are off about 15 points, driven primarily by weakness in oil and gas and another gap lower in the 10Y.
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Head & Shoulders patterns are fairly reliable harbingers of downturns. The one which has been setting up on ES for the past couple of weeks promised a 100+ point plunge.
It was just now busted by none other than VIX – the algos’ favorite signal – which caused ES’ right shoulder to marginally (by 1.50 points) exceed the head. 
With the pattern now officially busted, there’s no downside risk, right? If Congress’ failure to reach a stimulus compromise and foreclosure protection doesn’t matter, then sure. No more risk.
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