Headline PCE came in on target at 2.6% YoY and 0.0% MoM. Core was a tad higher at 0.1% MoM, also on target. Futures reacted positively, but have given up some of their gains after running into an important Fib level again.

continued for members…

There’s no question that last night’s debate might throw some cold water on the hopes and dreams of the status quo club. But, our basic premise remains in place – that the Fed, et al, will do what they can to prevent another tumultuous Trump presidency. This means continuing to lower inflation and interest rates and prevent a market meltdown.

VIX is still suppressed and poised to make new lows when necessary. Note that its RSI is coiling.

Currencies continue to operate very predictably, with EURUSD maintaining current levels and USDJPY pushing higher. The net effect is a slightly stronger DXY, which helps with inflation results.

Gold and silver’s runs are seemingly over, with the recent breakouts completely undone.

Oil and gas prices at an interesting inflection point. CL has backed off this red fan line many times before. If it does so again, it would be a huge plus for the inflation picture as support is in the mid to low 70s.RB has better downside protection, with the SMA200 at 2.398. This, of course, leaves TNX in good shape to drop to 4% or lower over the next few months. Bottom line, the market should continue to do well as long as oil/as prices behave themselves. Given the special relationship between Trump and the Saudis, this continues to be a big question mark. They could play the role of spoiler easily enough. Will they? What about Russia?

Stay tuned.

 * * *

I am back from my 500-mile hike across the Camino de Santiago in northern Spain. It was an amazing (but tiring) trip that I highly recommend for anyone so inclined. I am easing back into a daily posting schedule. Though, I am moving my youngest daughter on Monday and Tuesday of next week, so there might be another interruption depending on how that goes.