Despite the number of US coronavirus cases nearing 8 million and deaths approaching 220,000, the algos continue to focus on their daily dose of collapsing VIX.

It’s enough to make one wonder whether central bankers have found a cure for a market correction.

continued for members…The bigger picture shows VIX’s bullish 10/20 cross could easily unwind today.ES and SPX remain broken out with yet another gap higher.  The downside targets are looking less and less likely, but we’ll leave them on the charts as an indication of where things might have been (had VIX not been crushed, USDJPY nudged higher, and oil levitated) and might yet go if TSHTF.

DXY has clearly broken down, yet EURUSD seems unlikely to break out of the falling red channel. This means that any further declines in DXY would come at the hands of yen strength. And, a falling USDJPY would imply falling equity prices. In other words, stocks aren’t yet out of the woods. Now, it could be that VIX collapses so far and so fast that it completely offsets USDJPY and CL. But, for now at least, 10Y yields still indicates a collapse – which would consistent with a fear-driven pop in bonds – again, not positive for stocks.With Hurricane Delta having passed, oil and gas are settling lower again. Note that RB is about to see another bearish 10/20 cross.Gold has broken out and is currently backtesting the 1923.70 former highs, while SI is still struggling to break out at all. In other words, mixed signals re inflation.

CPI is due out tomorrow, so I’m going to spend the next few hours focusing on inflation and the oil/gas market.

UPDATE:  3:45 PM

ES just reached its .886 retracement, meaning we are very likely to see a reversal here. My favorite target remains the yellow midline, currently at 3218ish.If we’re to see a reversal, VIX will need to bounce here. The SMA10 and SMA20 are 26.9 and 26.86, so right on top of each other.COMP also fits the mold, reaching its own .886 retrace.