Futures are off sharply this morning as expected per our yield curve model and as indicated by our currency and oil/gas forecasts [see: Run, Don’t Walk.] We should find out shortly whether this is a garden variety buy-the-dip opportunity or something more substantial.

continued for members…With Friday’s ramp job in the rear view, the downturn targets have shifted slightly.

VIX’s bullish 10/20 cross has held – just barely. DXY has finally broken out as expected – though it took much longer than I imagined……primarily on the back of EURUSD’s reversal, which has a long way yet to go……and in spite of USDJPY’s premature bounce and push through its SMA50.  As we discussed last week, this is a strong signal to alogs – but it doesn’t come close to offsetting the EURUSD’s influence. Stocks are no longer able to ignore the 2s10s breakout. Though the 10Y looks completely tapped out here. An interesting conundrum for the charts…if 10Y yields were to fall significantly, this would be a boost for ZN – which has already broken down from its rising white channel. Can it rejoin the channel or is a backtest the best we can expect?And, what about its strong positive correlation with GC – which gave up on its channel breakout last week?  It’s even contemplating a drop through its SMA200.SI’s breakout also failed, but it’s holding cloud support and its rising purple channel midline at this time.UPDATE:  3:45 PM

The initial bounce came where expected and is having trouble getting back to green.