According to futures and talking heads, there’s a 94% chance that the Fed will pause its rate hikes this afternoon – though perhaps with a hawkish tilt. By our reckoning, equities have piled on at least 6% in the past few weeks in anticipation of this outcome.Is it justified?

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The breakout of the purple IH&S can be attributed to the dovish orientation. As we discussed the past few days, the pop above the .618 was also significant from a charting standpoint and forced the hands of many bears. But, it’s worth noting that VIX seems to have bottomed. The SMA10 will no doubt come into play today.And, since VIX was a primary driver of the past month’s rally, we should not ignore the possible bearish signal it sends.

Currencies, likewise, have been quite involved in driving stocks higher – with EURUSD ramping almost daily since the end of May and USDJPY ramping nearly 9% higher since March.

CL and RB have certainly contributed to lower CPI which has, in turn, provided the FOMC with the justification needed to pause rate hikes.

Yet, the 10Y has stubbornly remained in a tight range with the latest leg moving higher.UPDATE: 4:00 PM

It came down to a 5.07% plunge in VIX to get SPX back to black by the close.

The bond market was all over the map, with the 2s10s dropping to -92bps!