Durable goods orders gained a disappointing 0.4% MoM in August versus expectations of a 1.5% gain. This follows an upwardly revised 11.7% in July and 7.7% in June. Ex-transportation also came in at 0.4% versus 3.2% in July.   YoY, total orders are still down 11.3%.

Futures responded by slightly trimming their modest losses after bouncing 27 points from overnight lows.continued for members…

At this point, the narrative is getting rather muddled. Manufacturing and machinery gains continue, though modestly, while motor vehicles and parts were down 4% after gaining 21.7% in July. It seems as though the car buyers are hitting the pause button.

The most noticeable reaction to the news was in the 10Y. Yields broke down again, though slightly.  I expect to see a crack any day now.The bigger picture for equities shows ES/SPX just missed solid support yesterday.  ES’ SMA100 for instance…

…and SPX’s.The SMA200s are obviously also in play, though the falling channels indicated a wide range in timing – from today through the end of next week. Keep in mind that the last two Mondays saw pretty sharp declines from the Friday close.

TPTB don’t mind equities dropping to support, but they hate it when hoards of traders are along for the ride. Given a preference, they’d rather do it on a Monday – forcing at least some traders to the sidelines to avoid weekend risk.

DJI is still seeking SMA100 and SMA200 support.

While RSP – the equal weighted S&P 500 – has reached its but isn’t reacting much at all.VIX is playing hide and seek with its SMA200. Even though rates are lower this morning, DXY continues to push higher into its backtest.It’s getting help from both the EURUSD – still falling… …and USDJPY – which is as far as it can go without disrupting the downtrend.Needless to say, this isn’t helping GC or SI. SI is having trouble getting back above horizontal resistance (formerly support) and is starting to notice its rising SMA200. While GC has yet to actually tag its SMA100. CL and RB continue to levitate, acting much like VIX to send soothing signals to algos. As the chart below shows, the SMA10 could cross above the SMA20 very soon unless CL breaks down. Interestingly, RB’s SMA50 is still very slightly above its SMA200 – keeping the bears at bay.UPDATE:  3:50 PM

As we discussed earlier, shorting for the last few cents of downside to the SMA100s (or lower) will mean weekend risk – especially as ES is on the verge of a breakout and VIX a breakdown. I think the most likely outcome is a big downdraft on Monday with VIX making higher highs, USDJPY plunging just enough (103.43 or 102.37)… …to offset EURUSD’s drop to its SMA100 and neckline at 1.50 (for a hard bounce) and ……keep DXY from breaking out.

This would allow GC and SI to officially tag their SMA100s and start bouncing as DXY retreats. That’s what I think will happen. Is it worth the weekend risk to find out? Probably not. But, it’ll be interesting to see how it plays out.

Who knows, if SPX fell enough to actually tag its SMA100 (3205.72 – a 93 point drop from the close) it might even shake a little action out of Congress.