Futures are off about 0.50% as we approach Wednesday’s FOMC decision and a slew of important economic data.

continued for members…

The big picture shows a bounce that, if not for VIX and USDJPY, would have failed much sooner. VIX managed to hold the yellow TL on Friday, though it certainly hasn’t escaped algos’ attention that it’s back below its SMA200…

…and has a long way to go before it’s a threat to stocks again.EURUSD has reversed as expected… …while USDJPY is unsurprisingly back above the 1998 highs. The net effect is that DXY has held its channel – at least for now – and downward pressure on stocks.GC and SI are both trying to make up their minds, though SI is hinting at a flag pattern that offers at least a possibility of popping up to another SMA200 backtest.

Oil and gas are both lower – though no signs yet of another capitulation.

This leaves TNX on uncertain footing. It has held 4% and the TL from earlier in the year, but the buzz is that inflation has tempered and rates will subside. Readers would do well to remember that rates also decline in the face of sharp equity downturns.

If the Fed is serious about slowing economic activity, they can’t be too excited about the irrational exuberance of the past two weeks. Though a hike of over 75 bps might be unlikely, it wouldn’t surprise me to hear some very bearish talk from Chair Powell such as we heard at Jackson Hole.

Stay tuned…