More weak economic data was released this morning but was quickly followed (a coincidence?) by news of a phone call between Trump and Xi.

Initial claims were 247k versus consensus of 239k and unit labor costs rose a whopping 6.6%, up from an already inflationary 5.7%. This is a combination that supports our expectations of stagflation.

continued for members…

There is little change from yesterday, with ES and SPX at the top of their larger channels and just below their .886 Fibs. Note that the SMA10s have turned up again, reversing the rollover from a couple of sessions ago.

Likewise, VIX is still languishing at the bottom of its rising channel and VX is still playing cat and mouse with its SMA200. The euro is exhibiting sustained strength after the ECB cut rates again this morning, sending DXY lower in spite of the USDJPY holding its ground.

One notable breakout: silver. SI finally broke above the .618 Fib at 35.235 and is headed towards our 38 target. A break above 38.63 would open up 41.65.CL and RB remain fairly quiet, with CL remaining above its SMA50 and RB pushing above its SMA200 again.

TNX continues its breakdown and is approaching its SMA200 at 42.67.Stay tuned.

continuing…