Futures have been all over the map overnight, but are currently flat as algos try to figure out which superpower leader is lying through his teeth about trade negotiations.

continued for members…

I am working on a big picture set of charts, but this is what I’m expecting of SPX over the next month or two. It’s hard to know the exact timing, but with PCE, an FOMC meeting and CPI between Apr 30 and May 13, it seems likely that we’ll see much of the damage during that period. I still need to conform ES to SPX, so ignore the ES charts for now.

VX’s RSI suggests it has bottomed out, as does its backtest of the rising white channel .236 line. Currencies would likely participate, with a rise in EURUSD to 1.17-1.20.  Personally, I converted some USD to euros when EURUSD broke out at 1.11.

It’s hard to say whether the USDJPY will break down too. The Fed and BoJ have always coordinated things fairly well, but it will likely depend on how tariff talks go.  Note that DXY never did quite reach the rising white channl bottom that goes all the way back to 2009. So even a momentary drop below it would be disastrous. I am going to take a day or two to work on the big picture forecast. Given the anomalies with stagflation, the interest rate forecast alone is quite complex. Throw in the trade/currency wars and I find that I’m developing quite the headache!

Thanks for your patience and understanding!