Q1 GDP was revised down to a negative 5% from 4.8% as Durable Goods came in at -19.4%, the worst since the financial crisis.

Naturally, futures are up sharply……about equidistant between the important 200-DMA and the equally important 2.618 Fib extension at 3076.93.

It’s decision time for the men behind the curtain. Credibility has already been stretched extremely thin. Does it still matter?

continued for members…SPX is in a similar position – with heavy duty overhead resistance at its 2.618 at 3047.34 and the yellow channel midline up around 3111.  Traders might wish to take a crack at shorting at 3047.34 on the open – tight stops of course.

VIX is keeping its powder dry, and is showing signs of a rise to the SMA20.

Oil and gas are essentially flat, having delivered SPX to above its SMA200, this would be an ideal time to take a breather. On the currency front, we’re seeing a threatened breakout by EURUSD yet again. With DXY so close to its SMA200, I suspect EURUSD will reverse intraday. The USDJPY……has delivered NKD up and over its SMA200… …but this is also a channel top and could pose a problem for the bulls. And, while we’re talking about problems, consider that AAPL is still sitting right at its .886. A breakout to new all-time highs would come at 327.85. It would no doubt offer a huge boost to stocks. I take the fact that it’s not breaking out as a sign that TPTB are taking their feet off the gas.

The other signs, of course, are that CL has stopped climbing, USDJPY has not bounced up to and over its SMA200, and VIX hasn’t plunged down to and below its SMA200.

Likewise, COMP has not retested its .886.A quick reminder about the very big picture…

The 2.618 is one of the last Fib levels of resistance that should matter. I thought it would come into play last October, as a reversal at the yellow 2.618 at 3047.34 would have placed the resulting purple .618 right at the 2007 highs.

But, of course, that didn’t happen.  On Nov 1, SPX gapped above the Fib – prompted by VIX breaking below a 2-year old trendline, CL’s pre-Aramco IPO 5% intraday spike, and USDJPY’s bounce on the bottom of an well-trod channel.

For those wishing to take a walk down market manipulation memory lane:  https://pebblewriter.com/not-without-a-fight/The point is that we’re here again. The previous breakout obviously didn’t hold thanks to the coronavirus. You could say it caused the downturn. But, it really just let the air out of a very over-inflated balloon.

I think central bankers and their lackeys would ordinarily be satisfied with having SPX bounce around in the area between the SMA200 and 2.618 for the next few months until a vaccine comes along, at which point a breakout would seem more legit.

But, this is an election year. So, those who would like four more years of Trump are obviously going to do what is necessary to ensure the markets argue for his reelection. The further behind he gets in the polls, the more desperate they’ll get.

We know where Mnuchin stands. He carries a pretty big stick. And, so far, the Fed has been extraordinarily supportive of the markets. Though, here, there’s a little less certainty. We’ve seen Powell push back ever so slightly before. With SPX back within 10% of its all-time highs, I suspect the Fed will feel like they’ve done enough.

Our crazy conspiracy theories about market manipulation have been proven to be conspiracy facts as trillions have been thrown at the markets — announced on the very day that the Dow tested its 2016 election day lows.  Perhaps the Fed will be content to back off at this point.

If so, it should be a great trading market as resistance and support will matter more than usual.

Stay tuned.

UPDATE:  1:23 PM

SPX’s 2.618 obviously hasn’t held, but the day is only half over. ES just reached the yellow channel midline – the first of the three next higher targets between here and its own 2.618 at 3076.93. We’ll keep an eye out for a potential reversal here.Note that a reversal to 3047 would backtest SPX’s 2.618, the SMA5 200, and that little red TL on ES. In other words, it would leave things very unsettled. BTW, DB came within 2 cents of its .618 this morning, reaching 8.78 and backtesting a broken channel. This is a nice short with easy stops with an initial target of the SMA200 at 7.62 and additional targets at 7.35 and 7.19.

DXY has finally reached its SMA200, which means EURUSD and USDJPY are potentially at reversal points.  A drop by USDJPY through its midline would encourage some downside in stocks. UPDATE:  3:23 PM

This is the scenario described above. ES has backtested the red TL and its SMA5 200 while SPX backtested its 2.618 (3047.48 vs 3047.34.)  If VIX breaks out, SPX will close back below its 2.618.

UPDATE: 3:53 PM

This is the bottom of ES’ rising purple channel.  Important support, with the SMA200 just below at 2998.40.

Naturally, VIX is just now getting slammed back below its SMA10.