Futures are up slightly as the FOMC begins its July meeting. But, it’s a continuation of the consolidation that began last week.

continued for members…

While ES is back in its rising white channel…

...SPX is not.  Though, it did manage to retake its SMA50 – a positive sign. SPX suggests we’ll see at least a brief dip to, say, 5420 after tomorrow’s announcement.VIX is about to test its SMA10. EURUSD is continuing its modest slight white has been testing the SMA200 the past two sessions.While it came close, USDJPY never did actually tag its SMA200. So, there’s the potential for a quick dip to it after tomorrow’s rate decision. As a result of the above, DXY is pushing higher to its backtest target. This has contributed to SI’s dip to our next downside target……while GC still has its IH&S target in mind.Note that CL and RB are off significantly, with RB gapping down below its SMA200. Between the slide in energy prices and the slight possibility of a rate cut tomorrow, TNX is still threatening to break to new cycle lows. It has already broken down, just not in terms of horizontal support.The bond picture remains the same, with the 2s10s still sitting on the TL from June.

As mentioned above, there is a possibility of a rate cut tomorrow. The more widely held view is that the FOMC will merely drop more hints regarding a cut in September.

A surprise cut would obviously have the potential to goose equities higher, especially if the 10Y reacted by dropping through 4.14. While a decision to hold current levels would mean equities would need VIX to drop back through its SMA10 and SMA200, USDJPY to break higher, and EURUSD to stop sliding in order to keep the equity rally alive.

Stay tuned…