If a stimulus deal was unlikely before Justice Ginsburg’s death and the current SCOTUS battle, it’s all but impossible now.  Given that the stimulus payments and enhanced unemployment were largely responsible for the economic bounceback, this makes for a very downbeat economic forecast between now and election day.

Throw in the prospect of renewed/increased shutdowns in key parts of the world, and it’s hard to imagine the market rebounding from here.But Powell will get another chance to convince investors that the future isn’t quite so dire.  Something about tools, yada yada yada. While Mnuchin will likely say very little of anything (it’s his boss who has amped up the stakes in an obvious and understandable attempt to save his political skin) he’s very well versed in happy talk.

Anyone else notice that SPX reversed yesterday at 10.0056% off its recent highs? That’s 19 cents away from exactly 10%. Probably a coincidence…

continued for members…So far, the falling channel is on track – especially if ES is merely backtesting the SMA15-200 and the dashed white midline.

As discussed yesterday, SPX tested the red midline before bouncing. It’s more significant support. VIX cratered back below its SMA200 once SPX reached this support, but is still holding its SMA10 and SMA20, which are still bullishly aligned (bearish for stocks.) COMP, DJI and XLF continue to look sketchy.  DJI, in particular, looks very likely to tag its SMA100/200 intersection at 26,298.

Currencies are taking a breather after yesterday’s bearish action.  USDJPY is backtesting the purple midline before heading lower……while EURUSD is still slipping… …contributing to DXY’s breakout above the red TL and likely coming backtest of the purple channel bottom.GC made a lower low yesterday, bouncing off the red channel midline and now backtesting the 1923 former high. It still has downside potential to the purple channel midline. Note that the SMA10 is again slightly below the SMA20 at this moment – 1949.70 vs 1951. SI is in worse shape, with an intraday drop through the rising yellow TL and the falling red TL. This has been on our radar since the bearish 10/20 cross on Sep 15. It has horizontal support at 23.52, and then not much support until 21.51. The USD has had help from a slight bump in rates, with the 10Y climbing back into the triangle after its slight gapping breakdown yesterday. ZN continues to suggest Oct 28 as the next big equity and rate plunge. Last, CL and RB aren’t looking great. RB remains in a bearish 50/200 cross and is testing its SMA10 and white channel midline.While CL got a bounce at its SMA10, backtesting it after breaking back above it. But, it remains in a bearish 10/20 cross. If we expand the rising purple channel, I can envision a backtest of the SMA100 one more time.The Mnuchin/Powell testimony is coming up. I’ll post more after.

UPDATE:  12:52 PM

Halfway through the session…the testimony was dull and uninformative. Too bad the committee members can’t ask any interesting much less probing questions. ES has struggled with the SMA15-200 and is thus still on its back foot.  SPX closed its gap and, like ES, should continue falling provided VIX doesn’t break down and USDJPY can settle down just a bit.

CL and RB are picking up a little momentum in their declines. UPDATE:  3:50 PM

Coming into the close with a nice bounce in ES/SPX… …but not quite a breakdown in VIX: still inches away from a channel breakdown… …and a bearish (bullish for stocks) 10/20 cross. Remember that it was a bullish VIX cross that started the correction.

CL and RB have rebounded some, but note that CL reversed off of SMA10 support and RB has backtested its SMA10 – now resistance. API inventory is due out after the close and EIA tomorrow morning.