In the words of the immortal Edith Piaf: “I do not regret anything. No, nothing at all.”

SPX popped up over the potential resistance of its 3.618 Fibonacci extension in the final minutes of (algo) trading yesterday……almost entirely on the ongoing beatdown in VIX. And, since the Fed kicks off its 2-day meeting today as very disappointing retail sales and industrial production data (both dropping more than at any time since Mar 2020) are released, don’t look for algos to express any remorse for their bullish ways.

Though the breakout was obviously manufactured, neither the algos nor the FOMC will have any regrets.

continued for members…The bigger picture:

As the cash market opens, note that ES is experiencing a bullish 10/20 cross: 3876.93 v 3875.65.  SPX’s 10/20 cross is even slighter: 3876.88 vs 3875.61 on a trailing basis and virtually on top of each other using today’s prices. But, it’s a start. And, it illustrates how important it is for bulls that the Fed not do anything to stall this rally. VIX is testing the lows of the past year and dipping below its .886 yet again. It is following a very clearly defined TL lower which should reach the gap at 18.21 from Feb 21, 2020 by Thursday.

If it bounces there, USDJPY is still positioned to break out.

A close-up:

I believe this could offset a breakdown in CL/RB – but, we’ll see. I continue to believe a breakdown in oil and gas is necessary to contain the one risk that investors seem to be taking seriously: an uncontrolled increase in interest rates.Higher inflation could be just the sentiment that SI and GC need in order to prevent a breakdown. Whereas a breakdown in oil/gas/inflation might do some damage.

more later…

UPDATE: 3:45 PM

The market is offering zero clarity as go into the close.  ES is still in a bullish cross – by a whole 1 point.

While SPX remains in a bearish alignment. And, VIX hasn’t made much of a statement. The 10Y is higher, but isn’t making new highs.