A solid employment report is being hailed as the reason for this morning’s rally.

Yet, it’s hard to ignore the fact that USDJPY broke out……and VIX broke down overnight — hours before the report was released.  And, of course, futures also had a head start thanks to Trump’s early preview of the data.

In other words, the algos were triggered and the ramp job was well under way before any data was released. Will it be enough for carbon-based investors to ignore the troubles in Italy and Germany?ES is testing the top of its falling channel.  Will it have legs this time?

continued for members…

This is either the last shot at a great short or time to go all-in for the breakout.

Will VIX bounce off its SMA200, or will it collapse back to or below the yellow channel bottom? USDJPY has plenty of room left on its backtest.  A spike up through the SMA200 for another channel backtest (or beyond) would do wonders for bulls.Lost in the shuffle is the fact that solid employment numbers remove any impediments for the Fed to continue raising rates.  The 10Y has bumped higher and the 10s2s spread has given up its recent gains. SPX is on the verge…UPDATE:  11:00 AM

The SPX downside targets refined — if it doesn’t break out.

UPDATE:  12:00 PM

ES has broken out of the flag pattern and is backtesting the rising white channel from which it broke down on May 28.So, we have a breakout.  Will it have staying power, or will the backtest make for strong resistance?  Let’s look at the bearish indicators.

First, even with USDJPY’s breakout, DXY is still broken down.  If employment is so strong, then we should get more rate hikes, and the dollar should not be breaking down.VIX, though it’s off over 12% today, is backtesting the falling wedge it broke out of on the 29th.And, RB/CL still have further to go.  Whys and wherefores in an upcoming post…