With futures stuck in a consolidation for the past two weeks…

…and, VIX finally breaking down, is it just possible we’ll see a rally this morning?

And, why not?  Thanks to the timely dip in oil and gas prices (and, some creative accounting over at the BLS), CPI came in at an annual rate of 2.7% — down from last month’s 2.9%.

In other words, the argument for a December rate hike just got a little weaker.

Toss in a bullish (sp?) statement from Draghi [announcing the end of QE as the ECB trims its growth forecast …yeah, right] and the algos are loving it.

continued for members…

The EURUSD has rallied a little on Draghi’s comments.

And, the 10Y has backed off its latest triangle tag on the inflation news.

Offsetting the bullish algo movers: CL has reversed……and, RB has at least paused. Keep in mind it saw a big inventory build from API and EIA, but Florence is a threat to bears.USDJPY is testing its red TL a fourth time.  Note that it would be easy to characterize it as a neckline in a small IH&S pattern targeting 112.95ish.  The larger IH&S is also poised to pop, targeting 113.82 — just above our .886 target.  I think it is just a matter of time and will, like VIX, occur when needed.With SPX having completed its backtest of January’s highs and back above its SMA10, things are looking positive for the index.  Barring any unforeseen setbacks, the outlook is somewhat positive.

I think the trick to keeping the rally going will be getting RB and CL to a place where a strong bounce is justified and rallying USDJPY up to 113.59 while resetting VIX after it bounces off the yellow channel bottom.  It’s a balancing act that has worked pretty darn well so far.

Look for an update on DB in the next hour or so.  Quick preview: it has bounced off a neckline several times and shorts should be covered — to be reopened only on a drop through 11.