It’s fitting that the Case-Shiller Home Price Index and Consumer Confidence are both coming out on the same day. If you’ve been a homeowner the past few years and have enjoyed the Fed-induced rally, you’re probably feeling fairly confident. If you rent, and have watched rent payments surge along with everything else – again, thanks to the Fed – you’re probably not that confident at all.

Bill Dudley – former President of the NY Fed, vice chairman of the FOMC, and chief economist at Goldman – apparently agrees with me that the only antidote for the Fed’s largesse is a recession. We’ll see if consumer confidence can remain elevated.

Speaking of surging, futures are up about 40 points on the latest rumor of peace talks going well between Ukraine and Russia.

At least as important, VIX has plunged through its 200-DMA. This brings ES to important upside resistance…

continued for members…

…a backtest of the broken red channel. We’ll want to watch VIX very closely here as it has a TL of support from the Nov 4 lows.Oil and gas seem to have gotten the message about interest rates. Both are off another 4-5% this morning, with our backtest targets coming up.

This has been enough to bring TNX back to the top of the channel it broke out of – still uncomfortably close to the top of the falling yellow channel from the last century.

In currency developments, the euro has rebounded over 1% on the Ukraine rumors……while USDJPY continues to backtest. Ditto for GC and SI. BTC should continue to settle lower here, but I’d return to a long position on any push above the SMA200.

Bottom line, I think equities’ bounce has probably exhausted itself and lower prices lie ahead. But, I’d be prepared to go long again on any drop by VIX through that purple TL.