“No Joy” is an expression pilots use when they’re unable to see another plane, typically when they’re on a potential collision course. If you can’t spot it, you just might hit it. Like seeing a hilltop or radio tower dead ahead through clearing clouds, it can be fairly nerve-wracking.

Given that today’s jobless claims were worse than almost everyone expected and are just the tip of the unemployment iceberg, it’s next to impossible to bring the proverbial bottom into focus.  Is it 10 million claims?  Twenty?  Fifty?  No one knows, because no one knows how long the virus will be with us. [Our latest COVID-19 Update.]

Futures, which saw quite a bounce overnight on a bump in oil prices premised on a thaw in the spat between Russia and Saudi Arabia, have given up almost all of their gains and are about to turn negative.

Oil and gas are still up 9% on the day – but, the algos are ignoring it for the time being.

VIX has even seen a bullish 10/20 cross – all to no avail.  At this point, I imagine Fed and White House officials alike are wringing their hands, wondering what they have to do to get a bounce out of stocks.  The usual tricks are definitely not working.

Our downside targets remain the same.

continued for members…

Note that for all the excitement, CL has failed to retake its SMA10 or the  TL off recent lows. For traders, this presents a conundrum. As we’ve discussed, any bounce above the channel bottom should be bought with very tight stops. And, any drop below it should be sold. What do you do if it simply bounces back and forth?  Answer: find another sandbox.

The SMA20 is fast approaching current prices. We all know how that drill works: get it close enough and then manufacture a 10/20 cross – just like VIX experienced today. Usually, it’s enough to bump prices higher. I would expect it to be accompanied by some kind of a deal between Russia and the Saudis.  It obviously wouldn’t resolve the huge oversupply in the world. But, since when have supply and demand mattered?

The unspoken truth is that the politicians and CBs are playing games that will help oil companies but represent a tax on those least able to afford it: the millions of working people who are still stuck at a low-wage job they can’t afford to quit because they’re ineligible for unemployment or afraid to claim it. It’s essentially a wealth transfer from the “have-nots” to the “haves” so the haves can go back to enjoying big profit margins and inflated stock prices. Same as it ever was.

It would help, of course, if CL could push above its SMA10 as RB is attempting but will likely fail to do.

Note that VIX’s SMA10 is now below its SMA20 and VIX is below both.

SPX, which backtested its SMA10 on the close, should test its channel bottom pretty soon after the open.

Note that we have two channel bottoms at play: the rising white channel from the March lows and the gigantic yellow channel bottom seen below.

The DXY is rising but, again, only because the euro is still crashing.

It’s getting zero help from the land of the rising yen.

The 2Y and 10Y have gone pretty much nowhere, so the 2s10s is still about where it was – in neutral territory. UPDATE:  10:35 AM

As discussed above, a move by CL and RB above their SMA10s would really help stocks… The White House is on it.The only problem, of course, is that there’s currently a 15 million bpd oversupply. This would reduce the excess, but it wouldn’t chip away at the problem of too much oil already in the system. According to Mizuho, domestic tanks will be completely full within 4 months.

The algos heard and have delivered.  I would take profits/short at CL 26 and RB .75.VIX is almost down to horizontal support, with a handful of Fib levels and the red, dashed TL as the next levels of support.

USDJPY is helping out somewhat, breaking above the red TL.  Bullish, but it could obviously do much more if it were to retake the SMA200.This has sent SPX back above its SMA10 where it’s testing its SMA15 200. I have a couple of virtual meetings coming up at 11 ET.  I should be back around 1pm.

UPDATE:  3:30 PM

A lot of effort has gone into keep stocks in the green.

Keep an eye on VIX, which is still sitting right at horizontal support.  In golf you’d call this a gimme. The other factors are keeping things pretty close to the vest. But, honestly, if you have to ramp oil and gas by 20-25% in order to squeeze 1.5% out of stocks, something’s gotta give.

The 10Y has gradually edge higher, helping the 2s10s hint at higher.

But, the 2s10s is still well below breakout levels.UPDATE:  3:58 PM

Just like the old days…

UPDATE:  5:20 PM

If SPX were to drop to the white channel bottom tomorrow morning, it would also backtest the yellow channel. This would put it at 2416ish rather than 2363 – where the channel bottom was on Tuesday.

If, on the other hand, it can hold today’s lows and its SMA10, it has an opportunity to gap above both its SMA10 and SMA20 (currently 2580) as it catches down on Monday. This is a tried and true method of extending a rally we discussed on Mar 23 [FOMC Embraces MMT.]Note that the last time VIX dipped below this horizontal support, it was a head fake. ES plunged 190 points over the next 24 hours.