Fire and Fury

What a difference a day makes. Yesterday started off with the usual VIX ramp that turned into yet another breakdown below support, sending SPX to new all-time highs. Our Blusterer-in-Chief turned that around in a jiffy.

Moments after we adopted a short position at 2490.10, he raised the rhetorical stakes with North Korea, promising fire and fury (oh, and power) if they dare threaten the US again (which they promptly did…again.)

Part of equities’ problem this morning is VIX, which (live by the sword…) is back at our yellow channel bottom yet again. Moving above it would leave a mark.

The other problem is yen strength, which sent USDJPY to within 0.10 of our downside target before it was called on to help stabilize things.Assuming nuclear holocaust doesn’t envelop the markets in the next few hours, we have some interesting targets to consider. The most obvious is the purple .886 at 2463.46. Beyond that, things would get really interesting.