A 30-pt bounce in futures over a long holiday weekend is nothing new.  But, when it happens in the midst of longer-term bearish patterns which have yet to fully play out, it delivers very mixed messages.

Our yield curve model continues to point to lower stock prices, so we’ll regard this ramp as a likely pop and drop — at least for now.continued for members…USDJPY, which had been flashing bearish signals, is getting a big ramp as we head into the open.  But, it has yet to break out.EURUSD continues to look bullish (bearish for the US dollar.) And, DXY is still quite extended.  All of the above suggests that the Fed might come in more dovish than pretty much everybody expects.  With inflation about to take a nose dive, I still think there’s a very good chance of the December rate hike being delayed or at least accompanied by cautious, dovish commentary. Oil and gas are showing signs of firming.  But, RB’s bottom is more convincing than CL’s.

VIX seems to have found support at its SMA10/20, with a bounce up to 26.30 still in the cards. But, futures are currently showing a big gain after tagging their .886 Fib.The problem is that even 30-points won’t lift SPX out of the falling channel which it rejoined last week. And, plenty of market leaders still look just awful… …as does COMP itself.Last, rates appear poised for a drop — something that usually happens when stocks get slammed. Bottom line, I wouldn’t chase this morning’s rally.  Rather, I’d fade it, particularly if USDJPY backs off 113.41 and CL can’t maintain its bounce past 52.

UPDATE:  10:03 AM

SPX has reached the top of the falling white channel.  If it’s going to reverse, this would be a logical place.  Note that VIX has not yet made a new low, and USDJPY has not broken out.UPDATE:  3:14 PM

A quick update…nothing special to report other than USDJPY keeps slipping higher.  It’s propping up stocks, but to what end?  The early morning highs have not been broken, nor have they broken down.RB and CL are obviously helping, even though CL is still susceptible to another leg down. VIX has shed 10%, but is still wupported by the purple TL and the red midline. COMP has bounced nicely, but the SMA50 is 4 points away from a death cross.This leaves SPX at this morning’s highs.  In the absence of a breakout, it has to be regarded as a delaying tactic.  Indeed, our forecast from last week called for the low to fall on Nov 27, tomorrow.It was based on the yield curve model finishing its move by then.  From Powell: Slowing Global Growth:

I’m currently following a model which suggests that SPX will gap down on Monday or Tuesday to 2648ish, bounce for a few days, then down to 2608 around the 27th. This is a little earlier than the COMP chart suggests, so I’ve moved the COMP target to 6736 on Nov 27…This is where I think we’re headed.

We’ll get housing and consumer confidence data tomorrow morning, which could serve as a catalyst.  And, the GM news will no doubt be weighing on the Fed with respect to its Dec 19 rate decision.

I need to take off a little early this afternoon.  I’ll check in this evening if conditions warrant.

GLTA.