Housing starts collapsed 12.3% in June, the 4th worst report in the last 5 years.  Permits dropped 2.2%.

Futures barely budged on the news……as the 4% GDP growth narrative continues to dominate the headlines (Kudlow takes the mic at Delivering Alpha) and algos continue to be well-supported by favorable currency moves……and, conveniently timed dips in VIX.It remains to be seen whether or not carbon-based investors will read the tea leaves and determine that high interest rates and crashing housing starts might affect the actual economy.  It certainly used to — until 2009-2016 when the Fed began injecting trillions into the money supply.  Is it just possible that tightening might have the opposite effect?

continued for members…

ES hasn’t yet broken above the white midline, so that remains overhead resistance — with the .886 as the fallback position.  I continue to favor the downside case, however, with a slight drop to the white channel bottom and SMA10 (2787.23) being the nearest support.

Note that the Dow has officially broken out – though marginally so.  If it can poke above the purple TL, then the .786 comes into view.

SPX is nearing its own .886, with the SMA200 getting closer and close to the 2.24 at 2703. COMP broke to new highs yesterday.  A backtest of the purple channel remains a good possibility as the SMA200 is nearing it at 7248.91, the purple .500.While, CL and RB are treading water, waiting for the right time to complete their moves. UPDATE:  10:40 AM

EIA inventories are out.  WTI increased 5.8MM barrels and gasoline decreased by 3.2MM.

From the looks of things, we could see RB backtest the white channel line at 2.0435 or even the SMA100 at 2.0654.CL is behaving itself so far, but the red TL should be watched for short-term indications.  A move above it would cause to go long.  From the looks of things, SPX could use the help.The inflation problem remains, with retail prices still to high.  So, I don’t see this report as being one that would change our outlook.