Today is off to an interesting start.  Following Trump’s call for negative interest rates and more grandstanding on China in New York yesterday, headline CPI came in hotter than expected but right in line with our forecast. As we’ve discussed, this is the result of oil and gas trending sideways in support of the upcoming Aramco IPO.

On top of all that, the impeachment hearings get underway at 10AM and Powell testifies before Congress beginning at 11AM. EIA inventories are delayed until tomorrow due to the holiday.

It was enough to knock ES down by about 17 points where it finally reconnected with its SMA10 on the 8th session in a row during which it tagged its 2.618 Fibonacci extension.

It should be a pretty exciting day for a change.

continued for members…

VIX tested Monday’s highs and are backing off.  They’ll run into a rising TL around 13ish.

On the upside, they’ll run into TL resistance around 14.88 and plenty of SMA resistance above that. SPX should get a chance to test its own SMA10 later in the day.The rising red TL that cuts through the SMA10 comes from Oct 18, so it’s a nice target.  If the TL breaks down and VIX pops above 13.50, we’ll start looking for SPX to backtest its 2.618 Fib at 3047.34. This would be following ES’ lead. Oil and gas are under pressure, but this could change if the market selloff gains any strength. CL has tested its SMA200 seven sessions in a row so far…

USDJPY has dropped back into the white flag pattern from which it broke out, and should test the rising purple channel bottom.  Needless to say, a breakdown of the channel would help the bears immeasurably.

On the bond front, the 2Y is backing off its recent rally, but won’t have reversed the breakout until it drops back through 1.6%. The 2s10s is holding steady… …even as TNX settles lower in response to the overall market weakness, a slight uptick in fear and the CPI numbers. I don’t expect Powell will do anything to rock the boat, but you never know.

I’m going to sign off for now and watch the impeachment hearings.  I’ll be in meetings from 11-3pm. I should get a chance to post again later in the session.

UPDATE:  7:00 PM

Took a little longer than I expected…

Just as well, as today was pretty much a repeat of the last week or so.  We now have 8 tags of ES’ 2.618……8 tags of CL’s SMA200……and 11 days of VIX between 12.3 and 13.5.  The most ridiculous chart of the day was VIX, which soared 7.2% for all of two minutes on reports that trade talks were in trouble. 

It was the first day after 12 sessions that USDJPY didn’t tag or top its SMA200.  But, the channel support worked just as well.

More in the morning.