Futures have been pegged at the same breakout level for the past 48 hours now…

…as WTI has now reached our 74.25 target from August.

continued for members…

There should be a backtest, as there are still 6 weeks left until the end of the year. But, it might take a catalyst that overwhelms the algos. Each of the algo factors is doing what it can to maintain current prices.  VIX is inching lower, likely on a path to 12.73 for the 6th time since June… …as USDJPY inches higher and EURUSD maintains its “breakout.”This means DXY is still under pressure, but hasn’t yet reached its SMA200 for a well-deserved bounce.Oil and gas are at a critical juncture. If CL can hold the white channel bottom, then our upper targets are in play. It would certainly fit the fundamental picture which includes plenty of geopolitical risks.

If the white channel gives way, then the purple channel bottom offers a more complete backtest of the falling white channel from Feb 2022.

RB is testing 2.13 all over again. If it breaks down below 2, 1.95 and 1.89 are very likely targets…

…and the 10Y would likely dip below 4% just in time for SPX to rally up to our year-end target of 4667.Much still rests on the bond market. The 10Y can’t fall any more without breaking down, which would be a very positive development for stocks.

Yet, the 2Y continues to roll over. Can it catch up to the 10Y and, thus, end the inversion – which would be a negative development for stocks?

It will be interesting to watch/listen to central bankers as they try to thread the needle necessary to keep the inversion alive through year end. Not sure how they’ll do that, but it will mean keeping inflation fears alive, which probably means a bounce in oil/gas prices here. With oil and gas where they are, the next steps should be immediately obvious.

Stay tuned…