We’ve been beating the inflation drum for months, wondering when the folks behind the curtain would finally pull the levers to reign in energy prices.  Yesterday was a good start, as gasoline and WTI futures were both off sharply.

Ordinarily, we’d expect to see stocks suffer in tandem.  But, as we discussed yesterday morning:

So far, [VIX] has put the brakes on at a backtest of the recently broken straw-man trend line.  If it can remain below the red TL and the SMA200, and USDJPY keeps ramping, stocks will suffer a mild pullback.

That’s exactly what happened.  Another VIX pullback this morning……coupled with a breakout by USDJPY……has futures in the green by 15 points.But, of course, CPI isn’t out just yet.

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