In 2009, in the depths of the GFC with the S&P 500 tagging 666, about 11.9% of Americans lived in poverty.  In 2020, with the S&P 500 having recently reached 3393 after trillions in central bank intervention, the rate is estimated to be 12.4%, with projections of over 15% depending on how bad unemployment gets.Black and Hispanic Americans have it much worse.

Is it any wonder that as the gap grows between the haves and have-nots, we’re again seeing evidence of extreme anger and despair?  With so many unable to pay their rent or buy groceries, and the lion’s share of the government’s pandemic response going to large corporations, should we be shocked that people are protesting in the streets? How about when they realize they’re the guinea pigs in the establishment’s undeclared herd immunity experiment.

To use the talking head parlance, the market keeps “shrugging off” such economic realities. But, there’s something about protests, looting and riots that seems to get investors’ attention. Don’t be surprised if the market finally reacts.

continued for members…

A reminder, the purple channel has broken down shy of ES’ 2.618. The least we can expect is a test of the red channel bottom and/or the SMA200 at 3000.

SPX closed shy of its 2.618, which offers some hope for the bears. The problem with the downside case continues to be VIX.  It’s finally settled into a fairly well-formed falling channel. The SMAs keep dropping so fast that backtests don’t amount to much downside for stocks. And, the SMA200 is not far below, a threatening presence for bears. USDJPY also continues to prop up stocks, with its SMA200 just above current levels a viable threat. The euro’s relative strength, however, continues to depress the dollar.  As we saw in February and March, though, this can turn on a dime. Remember, we’re likely to see some dramatic drops in interest rates in the months ahead. These are the sort of flight-to-safety drops that accompany market weakness.

Presumably, this will result in another sharp compression in the 2s10s. But, remember, a breakout would do even more damage to stocks.Oil and gas continue to lend equities a helping hand, but their gravity defying days are numbered – particularly as the evidence builds that the coronavirus is every bit as dangerous as it was a month or two ago. Some of the canaries in the market-correction coalmine still look rather sickly.

UPDATE: 3:45 PM

Not much happening today. ES/SPX dipped, then proceeded to retrace .886 of the dip – with VIX/USDJPY/CL making little bullish or bearish progress.  Essentially a wash at this point…but, there’s still a little time left.

CL erased all of its losses.

Though, RB is looking very tired. DXY finally officially tagged its .618. While, USDJPY did little to help the bulls. VIX is still up on a day when SPX is showing a healthy gain — looks like it could go sideways one more day without breaking out or down.Bottom line, this still feels like a stall.  Though, technically, a close above SPX 3047.34 would be bullish.