After nailing Friday’s downside target, ES made another “miraculous” recovery and is pushing toward new, all-time highs. Move along, nothing to see here… It will come as no surprise to members that the latest recovery was almost entirely driven by another collapse in VIX.  The other factors: more silliness from oil/gas and a healthy dose of short covering.This morning, as algos were deciding whether to complete another ramp job, VIX dropped down through its remaining moving averages – thus guaranteeing a positive open as the FOMC’s two day meeting gets underway.

continued for members…The bigger picture shows a potential breakout to SPX’s 1.618, with ES’ 3.618 extension first up. This would tag the top of the rising yellow channel.

VIX has plenty of room to continue breaking down without even testing the recent lows.  Needless to say, it remains in a bearish 10/20 SMA alignment.Yes, RB and CL should continue to be a drag on stocks.

But, USDJPY stands ready to lend a hand by remaining poised just below a channel breakout. Even though it has gone nowhere, the algos are certainly aware that it remains in a bullish 10/20 alignment and is .37 away from a breakout.

EURUSD is pausing as its SMA100 and SMA200 rise up. I continue to expect a backtest of each.The pause isn’t helping DXY much. It continues to wallow near its .886 Fib as it has for the past six weeks. SI and GC continue to coil, with a breakout or breakdown necessary in the next session or two. 10Y yields and the 2s10s continue to slip lower, but at such a gradual pace that it isn’t upsetting stocks. So far, ZN’s bounce is doing little for GC.I’m not convinced the Fed is determined to test SPX 3956 at this point. I think the recent strength, and yesterday’s stick save in particular, is just a garden variety prop job like we see in the lead up to virtually every FOMC meeting.

A reminder, consumer confidence comes out at 10am.

I’m going to take the rest of today off. My daughter Kimberly, who just gave birth to a beautiful baby boy six weeks ago, was recently diagnosed with breast cancer. It’s the aggressive kind, but thankfully has not spread yet. She starts chemotherapy today and I am having a hard time thinking about much of anything else. For those who are so inclined, prayers would be much appreciated.