The correction is gathering steam, with ES off 40 points earlier this morning before getting a bounce. From a technical standpoint the culprit is VIX, which broke out of the falling channel which has guided stocks higher since March 2020. Our downside targets remain unchanged.

continued for members…

The big picture for stocks…

As anticipated, VIX is breaking out and doing some backtesting.  I’ve added another target along the rising white channel top which would be a quicker backtest and .618 Fib retracement. This breakout certainly woke up the algos. Our longstanding thesis that inflation is a problem that the Fed would have to contend with is finally playing out in the oil/gas markets. The targets are not clear cut, but a reaction at the SMA200s makes perfect sense.

DXY and EURUSD are nearly to our targets…

While USDJPY is still treading water – waiting for its SMA200.The 10Y hasn’t yet reacted much to the selloff, but that could change once SPX drops through its SMA50 – something it hasn’t done since last March.ZN is back in breakout mode, which suggests more upside for GC.But, GC has yet to do any better than a nice backtest of its broken channel. Its SMA20 remains a good line in the sand. Last, BTC is back below its SMA200, opening the door to a lower low as per our forecast.GLTA.