Bullard: Wait, Did I Say That?

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Not that futures needed any help melting down this morning, but Jim Bullard just poured gas on the fire. Yes, Jim Bullard! The Fed president who never had a hawkish thought in his life.

"We were expecting an inflationary impulse, but this has been more than what we were initially expecting," says James Bullard. "The ideal path in my mind would be the 3% this year will be okay, and then we'll get it down to 2.5% next year and we'll converge to 2% from there." pic.twitter.com/i9vSio57GM

— Squawk Box (@SquawkCNBC) June 18, 2021

Then, he trashed the Fed’s most nonsensical policy: throwing $40 billion per month into the mortgage market when mortgage rates are already at all-time lows.

"I'm leaning a little bit toward the idea that maybe we don't need to be in mortgage-backed securities with a booming housing market and even a threatening housing bubble … we don't want to get back in the housing bubble game," says St. Louis Fed President James Bullard. pic.twitter.com/fDMkw9ckL9

— Squawk Box (@SquawkCNBC) June 18, 2021

Bulls better hope that ES can bounce at our next downside target: the 50-day moving average currently at 4174.

It appears that algos are finally being given the green light to (drumroll please) decline.

continued for members…

The big picture shows lots of downside if the rising white channel doesn’t hold.

Ditto for SPX:

Aside from stocks recognizing what a pickle the Fed is in, they’re being given the green light by several algo factors.

VIX is making a nice move and could easily reach the SMA200 and potentially see a bullish (bearish for stocks) 10/20 cross later today.CL’s rising wedge is breaking down.

And, RB’s trend line is having trouble as well.

USDJPY has, at least so far, declined to break out.DXY should get a boost from stocks’ troubles.And, EURUSD is on the brink of a breakdown. SI is clinging for life to its SMA200.And, GC faces another incredibly important backtest. BTC is having another bad day and seems to have given up on another backtest of its SMA200.And, NKD and DJI have officially joined in. Last, the bond market seems confused – with TNX’s downside potential increased by oil’s slide……but a ZN chart that looks like it wants to break down too.