ES reached our next downside target a few hours ago. This is important support. The size of ES’ bounce and VIX’s reaction upon reaching its 200-DMA (26.09 – don’t worry, it will) should determine next steps.
Assuming that Powell will not be able to satisfy the market’s concerns in his interview later today (tools to deal with inflation? what tools? how, without raising interest rates?) we’ll look for a bounce there and a drop to the red .786 where it intersects with the rising white TL at 3721.25 – ideally on Monday.I’ll be working on the recent Update on Currencies for the remainder of the day but will check back in if anything unexpected happens.
I recommend this Bloomberg article for anyone trying to get a handle on what’s going on in the bond market. I continue to believe the inflation/interest rate dynamic will be the most important variable going forward. If you’d like to know what time it is rather than how the watch works, check out the recent Oil/Gas Update.
UPDATE: 2:00 PM
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