Draghi says he’s prepared to do even more (is there anything more than “whatever it takes?”) and the German 10Y continues to slump further into negative territory.

What did it accomplish, you might wonder?  While obviously not changing the prognosis that the ECB will soon be scooping up everything not nailed down, it did manage to break DB above the TL that’s been in place since Jan 2018 (whether it will stay there is another matter.)Meanwhile, the Fed’s task of justifying a rate cut just got a bit more complicated as durable goods strongly beat expectations.Stocks aren’t likely to respond favorably, though there’s now a bit of a technical buffer in the 10-day moving averages.

continued for members…

SPX is likely to broaden its very narrow rising wedge, if not break down all-together.

But, I’ll be watching closely to see if VIX’s falling wedge can hold it together.Oil and gas remain bearishly aligned, even though they’re in the midst of a bounce designed to delay a downturn. And, the EURUSD got a bounce off the channel top as expected… …which left DXY pretty much where it was……as USDJPY loiters well above its downside target of 101.  The last time EURUSD bounced off a new low (Apr 25), it cost SPX about 200 points.It remains fairly likely that, with yesterday’s new highs which came within 0.9% of the 2.618 Fib extension, stocks are done.

AAPL has still not broken out.  BA’s latest bump is falling apart.  Even FB is coming up against Fib resistance at its .886 amidst rising opposition in Washington. I don’t pay much attention to the DJIA, as it’s a bogus index.  But, TPTB like to tout it and the average guy watching CNBC at the gym or from his barcolounger doesn’t know any better.

If stocks are going to rise into next Tuesday, you’d think the Dow would be breaking out right about now.  But, it’s not only not breaking out……it’s threatening to break down — clinging to the bottom of a little flag pattern as well as its SMA10.Yes, we could still see one last spurt higher early next week.  But, I remain perfectly happy being short.

UPDATE:  1:30 PM

ES has reached fan line and SMA10 support and appears to be rebounding.  SPX’s pattern is rather messy, but it has also bounced off its SMA10.  This, as VIX retreated from the red fan line from the May 9 highs.The April 30-May 1 FOMC meeting in which the Fed left rates unchanged was, in some ways, fairly similar to next week’s. The consensus was that rates would be unchanged.  No surprises there, but a bit of a disappointment to the bulls who had bet on a more dovish statement.

SPX didn’t waste any time in beating a retreat from the May 1 highs, giving up 226 points (7.7%) and eventually bottoming when ES absolutely nailed its 2.24 Fib at 2728.75.The interesting comparison to me is what was happening with the USD and the EURUSD in particular.  EURUSD had backtested the white channel top on Thursday, April 25 – a few days before the Tuesday rate decision.

Today, being the Thursday before the next rate decision, EURUSD did the same thing.  Both instances are marked with a yellow arrow below. Since I’m expecting a disappointing decision next Tuesday, it’s interesting that EURUSD is following the same pattern in the lead up.