January CPI came in hotter than expected, taking a March rate cut off the table and casting serious doubts on a May rate cut.

Futures are off sharply, shedding over 1% to reach the bottom of the rising green channel from Oct 2023.

continued for members…

The green channel bottom has caught downturns twice before. If it doesn’t hold – and, I think this is more likely than not – we maintain the forecast for the SMA50, currently at ES 4818 / SPX 4787. SPX is in the same boat. SPX shows the SMA50 reaching the previous high backtest level as soon as Friday, Feb 16.  A slightly less bearish scenario is the 2.24 at 4883. And, though I hate to say it, a breakdown will come down to whether or not VIX can hold its SMA200.Currencies are supportive of lower equity prices, with EURUSD continuing to slip lower but not yet in any kind of panic.

GC is nearing our SMA200 and channel backtest target. CL is still hanging around its SMA200 while RB is still approaching its.

Between resilient oil/gas prices and the January CPI, the 10Y has surged to within 39 BPS of our SMA100 target – currently at 4.346%. UPDATE: EOD

Pretty wild day, with SPX off as much as 100 pts intraday before bouncing back at the close to the bottom of the rising green channel [BTW, some of you pointed out that the initial post said it was yellow – I am green colorblind and should probably never use the color green!]

So, we’re left with either a backtest – as seen on the 60-min charts – or a daily candle with a long tail that closed in the safe zone.

Note that even RSI hints at the worst being over.Although TNX didn’t quite get to our 4.346 target, it got awfully close at 4.316.