Fitch downgraded US debt from AAA to AA+, adding to stocks’ overnight decline.

continued for members…

This has the potential to take the .886 off the table, as the SMA10 is rolling over and VIX has broken out. Note that VIX is not only breaking above the red TL from March, but it’s about to see a 10/20 cross and its RSI has broken out as well.

Although the downgrade might be expected to hurt the value of the USD, the fear trade is taking precedence. DXY is up, and testing the little red TL… …even as TNX is higher. CL and RB are split. The 2Y has remained relatively stable relative to the 10Y, meaning that the 2s10s is testing that dashed red internal TL again.  Should the 2Y yield start to decline, it would be quite negative for stocks.