While a higher dollar might help mitigate inflation, higher interest rates are starting to bite. Both mortgage refinancing and housing starts and permits tumbled in April.

Futures tumbled about 5 points on the news.  But, even that was a problem, as SPX is perched precariously atop the critical support of its 2.24 Fib extension at 2703.62 (not exactly a random walk…)It should come as no surprise to readers that VIX has already begun its nosedive.Meanwhile, Deutsche Bank — the third largest bank in the eurozone with $1.8 trillion in assets and $40 trillion in derivatives — continues its meltdown, closing in on our target from Feb 7 [see: What is Deutsche Bank Trying to Tell Us?]  But, hey, VIX is off 8%!  Everything must be awesome!

Will investors algos even care about the stagnation which, abetted by inflation-driven higher interest rates, has ensnared the economy in its razor sharp talons?  Or, will a tumbling “risk indicator” and copious share buybacks be enough to ward off a correction?

continued for members…

SPX is in limbo until VIX declares its intentions regarding rejoining the purple channel.

Ditto for DJIA.

CL remains way higher than its YoY comps — meaning May Inflation will be higher and June’s higher still.  Translation – higher rates unless oil/gas come back down.  From a fundamental standpoint, the IEA says demand is falling off and API reported a crude inventory build.