VIX continued to play cat and mouse with its 10-day moving average, yesterday, leading to generally positive gains for stocks.Those gains have faded, however, and futures are slightly negative in the minutes leading up to the open.  Dollar weakness continues to be a headwind…

…and the yield curve continues to steepen.With SPX falling a few points short of our upside target, we could see it take another run today.

It’s worth noting that Deutsche Bank, which reached our 10.30 target back on Jun 27, is closing in on our 13.10 target.  This would mean rejoining the purple channel from which it broke down in May [see: DB: On the Ropes.]   This is an important test for DB and, by extension, for the ECB.

continued for members…The Dow finally broke out somewhat, but not to new highs.

ES remains within striking distance of the .886… …as does SPX. The dollar’s weakness hasn’t resulted in any big moves…yet.

Likewise, TNX continues to move sideways.A couple of stocks of interest…TSLA is threatening to break trend again. GOOGL made a nice move yesterday, but couldn’t quite reach the 1.618. COMP’s SMA200 is very, very close to the channel top.  If there’s going to be a backtest, it’s time for it to start. And, oil and gas are waiting for confirmation from EIA, coming up at 10:30, of yesterday’s somewhat bullish API inventory report.If the EIA average gas price for July (2.77) works its way into the BLS inflation figures for the month, then there’s a good chance CPI will fade at least a little, from 2.9% to perhaps 2.8%. Look for more VIX bashing today.  Already, it’s slumping below its SMA10, taking ES back to nearly flat.UPDATE:  10:35 AM

The EIA data came in fairly bullish, with a 6.1MM barrel draw in crude and a 2.3MM barrel draw in gas.

Interestingly, RB popped from 2.1163 to 2.125 and came right back down.  It was a very muted response.  CL popped from 68.64 to 69.37 and is just now slowly backing off its highs.There are plenty of upside targets if RB and CL should make a run.  But, so far at least, the response has been underwhelming.

UPDATE:  10:50 AM

A few minutes on… Stocks, which were up a few points on the initial release, are back to a slight loss.

UPDATE:  2:13 PM

The stumble turned into a rally, as seems to happen a lot these days.  SPX, however, just got within a point of its .886.  So, there’s a decent chance it’ll reverse here.  The initial downside targets:

SMA10 at 2800
SMA20 and white midline and purple midline at 2773ish
2.24 (and, soon to be SMA200) at 2703

The potential hitch is that ES is still 5 points shy of its .886.  If they run it up there, SPX will overshoot its, meaning the whole thing could get carried away to the upside.  Note that VIX hasn’t even begun to go crazy.  If you short here, use reasonable stops. I really like the idea of a reversal here for CL.  Note that it completes a backtest of the former supportive TL connecting important bottoms.