It was going to happen sooner or later.  Real estate developers are all about leverage.  And, leverage is all about the cost of capital.

The FOMC is trying to create some headroom for the next time they need to rescue the stock market economy — apparently not as important to Trump as are the midterm elections.

Though it hasn’t broken down just yet, the US dollar is taking it on the chin… … and USDJPY is circling back for the backtest we’ve been expecting.Futures, which nailed our initial downside target during the yesterday and our second overnight, are off modestly — especially given that VIX broke out.

Bottom line, Trump’s latest outburst threatens to undo Powell’s market-calming, algo-goosing testimony.

continued for members…

Futures are behaving themselves so far.  The white channel bottom remains the key.SPX’s SMA200 continues to near the 2.24.  I still like the idea of a drop to backtest them together, though there’s a lot of support in those 100ish points.

VIX broke out of the latest falling TL, but could run into trouble at the SMA200 and next falling TL.COMP’s SMA200 is finally set to emerge from the falling purple channel.And, DJI is making the case for nothing more than a SMA10 backtest.If things get going, the timing looks like SPX 2700 and COMP 7248 around the end of the month.  If not, we have some .886s to tag or push through.

NKD is slumping again after failing to push through the purple midline.A drop into month’s end would work nicely for RB and CL – which are currently bouncing in order to cushion the blow for stocks. The EURUSD got a boost, not ready to break down just yet.  If DXY gets some momentum, might we get a least a SMA200 backtest in the next session or two?The 10Y is ignoring the whole thing…so far. Though, the 10s2s is actually getting a bump.I have to be on the road this morning, should be back around 2pm ET.

GLTA.

UPDATE: 3:55 PM

Nothing too exciting to report other than DXY breaking the little TL we drew this morning.USDJPY almost finished the backtest.

While, VIX kept stocks from making much of a move. All in all, today’s session did little to inform the bigger picture.  DJI is still broken out — if just barely.COMP remained subdued, while several of the most watched stocks held trend. NFLX still appears headed for (at least) its SMA100.While TSLA is clinging to support despite some pretty damning headlines.

Even though the market is doing exactly as it has been — creeping higher on algo trickery via VIX, CL and USJDPY — it definitely feels like the risk of a sudden downdraft has increased.  Once again, SPX reached a weekend looking bruised, battered and rather woozy — potentially the calm before the storm.

We’ve talked many times about a quick drop to 2703 (-3.5%) to coincide with the SMA200’s arrival.  I think there is at least 50:50 chance of this occurring, which means there is nearly a 50:50 chance of things continuing to grind higher.

I’m going to do a lot of charting over the weekend, and hope to find some clarity regarding the path forward.  Until then, this is a good time to remain cautious.

Have a great weekend, everyone.