Crossing the Rubicon?

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ES has reached the top of the falling white channel we added a couple of months ago. At 76 points below all-time highs, a 2.2% move higher would make quite a statement about the integrity of the S&P 500 – essentially that a connection between equity prices and macroeconomic conditions is no longer a reality, nor even a consideration in investing. Imagine future FOMC press conferences and the derision that pretenses to the contrary would invite.

Is the Fed ready to cross the Rubicon? Or, could this finally be the end of the road?

continued for members…

The channel in question, based on the lows and the midline tag back in Oct 2018.

The SPX version:

We’ll want to keep a close eye on VIX and 23.54. It obviously has additional potential down to the .886, but a bounce back above the former low would be telling.USDJPY appears ready to roll over and race down to the white channel bottom.

While EURUSD is still loitering near the top of the falling red channel… …and DXY is showing additional weakness. GC is coming up on its 1.272 extension, the next upside target. It would dovetail nicely with a plunge by DXY to 91.358. Oil and gas are up sharply this morning ahead of the EIA inventory. Yet, a mere .40% move in ES in exchange for a 4% move in CL and RB is odd.

10Y yields continue to ease lower, with ZN staying on top of its TL and the 2s10s still slipping with the 2Y having clearly broken down. A couple of other potentially significant charts…

RSP, the equal-weighted ETF of the S&P 500, has stalled at its 2.618. And AMZN is still making lower highs.AAPL, about 16% of the S&P 500 these days, is due for a backtest of its 1.618 and former high at 399.82 – a 10% drop from here.UPDATE: 10:45 AM

EIA inventory agreed roughly with API. Although oil inventories decreased by 7.4mm barrels, totals decreased by only 2.1mm. Note, also, that oil inventories are still 16% above average for this time of year. CL and RB are both retreating from their earlier ramp job highs.

UPDATE: 3:45 PM