The markets weren’t exactly reassured by Powell’s testimony yesterday.  Bottom line, no one in their right mind buys the idea that we can have such strong GDP and wage growth but still need such accommodative policy. IMO, Powell was curt and sometimes downright evasive, which didn’t help matters.

Stocks plunged to our initial downside target, closing well below the SMA10 (a rarity, lately) with additional downside potential this morning.

AAPL tested its channel top and retreated.  As we discussed yesterday, this failure to break out has weighed on the overall market.continued for members…

VIX has broken above the SMA50 and came close to testing the top of the rising white channel.  The key test will come at 15ish.A breakout of the little white channel means a test of the SMA200.  A breakout above the SMA200 opens the door to much higher marks.SPX is in prime position to test the bottom of its rising wedge (roughly 2915.44) on the open.  If the wedge breaks down, things should get interesting.Oil is sliding again this morning, with the white midline the only thing protecting it from a dip to the SMA200 at 60.96.RB is also off, but not making any new lows just yet. USDJPY is currently nudging up above its SMA200 (111.493) and is thus acting as the brakes on a big move in stocks.

I’d keep a close eye on moves above and below that line, as they will be telling the algos what to do — particularly as ES backtests its SMA10 at 2928.93 (2925.3 for SPX.)Combined with a failure of EURUSD at the SMA20……this is giving DXY a bounce… …which means GC is testing its recent lows.  Recall that we still have the SMA200 at 1267.80 and a lower target at the .618 at 1251.10.Not surprisingly, the 2s10s has retreated to 20 bps, backtesting the recent top.The 2Y has bounced a bit off the red TL. The 10Y rebounded from yesterday’s Powell-induced dip, closing the gap just a bit. UPDATE:  12:00 PM

CL just tagged our SMA200 target at 60.95 — 8.4% from the recent highs. This is an important threshold for the bulls as a drop through it would signal more equity pain to come.  Traders should consider reverting to long with tight stops. RB appears to have a little further to go, though the yellow midline at 1.995 might act as support.SPX’s and ES’ rising wedges officially broke down.  If we draw a rising channel on ES’s chart, we can see potential support at its midline at 2901ish.  This is a fairly imprecise placement, however, so it allows for a push as low as 2890.SPX’s is a little better fit.  The low of 2900.50 might stand simply because it’s an important round number. If so, we would expect to see USDJPY and CL rebound. And, we would expect to see VIX reverse lower even though it didn’t quite reach resistance.Even if we expand VIX’s rising channel, it still doesn’t appear done.  In fact, the channel top has already arrived at the SMA200.AAPL remains an intriguing element of the picture.  A plunge to its SMA200 would make perfect chart sense if it happened quickly and the company stood by and did nothing about it.  Therefore, it’s probably too much for the bears to hope for.  Closing the gap might be the best we get if TPTB wish to hold SPX 2900.