Futures are off about 2% following yesterday’s FOMC announcement and press conference – the closest we’ll probably ever get to a mea culpa – which was accompanied by the usual algo nonsense. Suffice it to say, traders have come to their senses and markets are once again reflecting the likelihood of the Fed tightening into a recession.

Our algo remains on track, with much lower prices to come after whatever this bounce amounts to. Note that tomorrow is OPEX and Goldman estimates that options representing a huge $3.4 trillion in notional will expire ahead of a 3-day weekend. No pressure…

continued for members…

Note that VIX’s gap has been closed, but it still hasn’t broken out above that fan line from its pandemic highs in 2020. Once again, the euro is trying to avoid lower lows – that much harder now that the SNB has joined the rate hiking party.

Interestingly, the USDJPY is backtesting its recent breakout. You can’t help but wonder if it simply got out ahead of its skis and will start contributing to stocks’ breakdown. Oil and gas are both singing the demand destruction blues this morning. At some point, we might even get some lower lows…

…but for now, the 10Y continues to hold its breakout. I’ll be out of town the rest of the day, but back again in the morning.

GLTA.