Futures are up moderately ahead of the House vote to reopen the government.

I seriously doubt it will go smoothly.

continued for members…

There are a couple of noteworthy developments worth watching: VX and USDJPY.

VX is exhibiting a clear breakdown. A drop through the SMA50 would confirm it.And USDJPY is, again, threatening a breakout. Remember, this would mean renewed strength for the dollar.

But, it appears EURUSD is just going to loiter here at the dashed, red horizontal support until the SMA200 arrives.This would outweigh the USDJPY in terms of overall USD strength measured by the DXY.

It’s easier to see if we zoom out. A breakdown means USD strength which typically hurts equities. So, TPTB have an incentive to keep it above 1.15.As a result, it’s going to be a tough slog to get DXY up to its channel midline (at least before the EOY) particularly with the SMA200 in the way.  RB has been on a tear and is reacting slightly at its SMA100. The bigger target is the SMA200 when it reaches the white channel bottom.

CL has declined to break out yet again. It’s remained below the fan line from Jun 24 for quite some time. It can easily remain below it but above the rising TL until mid-December. So, it probably will – ultimately breaking out or down after YE.

This could put a dagger in the heart of our 10Y forecast of breakdown to 3.87 or 3.75, let alone 3.25.

What could salvage it? The Supreme Court. Suppose they struck down the tariffs and prices were expected to decline enough to send inflation much lower?

That could do it.

Stay tuned…