The 10Y broke out again yesterday, sending and S&P 500 100 points lower on the day. The House’s budget bill passage, which promises to sharply hike the deficit/debt while cutting medicare and medicaid, won’t help.

The next big test for bears will be SPX 5767, the 200-day moving average.

continued for members…

Note that ES has already accomplished this, closing below it yesterday.

EURUSD is working its way higher again……while USDJPY continues to break down.

The combined effect, again, is a breakdown in DXY even as interest rates are moving higher. A declining US dollar obviously raises inflation, and so far there’s no help from CL and RB despite the promises likely made by the Saudis. The 2s10s got a nice bounce at the bottom of the purple channel, increasing the likelihood of a very significant correction or, if it surpasses 70 bps, new lows for equities.

Existing home sales come out at 10am. With the 30yr back over 7%, this data could take on added significance.

GLTA