Futures are slightly lower as investors look forward to a slew of earnings announcements. This will be the 4th day that ES tests its .886 Fibonacci retracement.

continued for members…

VIX continues to drive the bulk of the upside, nearing the Sep 2025 and Dec 2024 lows since breaking down in late Nov.

The other algo driver is the faltering DXY, with most of its weakness courtesy of the euro. Interestingly, the dollar’s weakness is in contrast with a resurgence in the 10Y…

…which is occurring despite continuing suppression of CL and RB.

But, the biggest risk to equities is still a steepening yield curve. At 62 bps, it’s sending a warning signal.  At anything north of, 67 bps, the year-end algo led rally could fizzle very quickly.

Stay tuned…