Keep an eye on home sales, due out at 10am ET. Shelter has been one of the more problematic categories of inflation for the Fed, showing a 6.2% annual increase in December. Without a doubt, it remains the biggest impediment to getting inflation back down to 2%.

Like yesterday, the overnight ramp has faded as we approach the open.  The housing data could determine whether we see a more robust backtest or new highs.

continued for members…

Note the the SMA50 has arrived on the scene, so a backtest of it is still on the table.

VIX gapped lower overnight, even though it never quite reached its SMA200. The SMA10 remains above the SMA20, but just barely.Currencies remain in a holding patterns, with EURUSD still holding just above its SMA200 and USDJPY inching slightly higher leaving DXY clinging to its SMA200.

CL and RB are both up slightly… …leaving TNX at levels not seen since Dec 13. More later…

UPDATE: 2:45 PM

Existing-home sales in the United States dropped by 1.0% from a month earlier to a seasonally adjusted annualized rate of 3.78 million units in December 2023, reaching the lowest level since August 2010 and falling below the market’s anticipated 3.82 million units. Sales of single-family homes decreased by 0.3% to 3.40 million, and sales of condominiums and co-ops sunk 7.3% to 0.38 million. Among the four major US regions, sales slipped in the Midwest and South, but saw an increase in the West, while remaining unchanged in the Northeast. On a year-on-year basis, sales witnessed a 6.2% decline. Considering the 2023 full year, existing-home sales fell to the lowest level in nearly 30 years. “The latest month’s sales appear to be the bottom before inevitably turning higher in the new year,” said NAR Chief Economist Lawrence Yun. He attributed this potential upturn to lower mortgage rates compared to the preceding two months and anticipated a boost in inventory in the coming months. source: National Association of Realtors

The chart that folks should be watching. Sales and prices rarely diverge for very long (i.e. something’s gotta give/)

That should about do it for today’s OPEX excitement. Note that VIX has also bounced nicely off loads of MA support.