It’s a day we all knew was coming — over 1 million cases of coronavirus cases officially diagnosed in the US, over 3 million worldwide. Experts such as Scott Gottlieb, former head of the FDA, estimate that actual US cases are 10 to 20 times the reported figure. Deaths currently stand at 56,803 – about 30% of all closed cases.

Social distancing has slowed the rate at which new cases are being diagnosed. But, with many states reopening, a shortage of tests, no contact tracing, and no viable therapeutic or vaccine yet available, the number of cases and deaths seems likely to accelerate.

The market continues its oblivious ways with last night’s low-volume meltup good for about 1.5% so far as the Fed begins its two-day meeting.continued for members…

The bigger picture for ES shows a lower – but not zero – likelihood of a SMA10 backtest, at least before  the .618 tag……with the SMA100, SMA200 and IH&S targets coming into view. The picture is quite similar for SPX:The .618 represents not only an important Fib level but the .786 channel line as well – a natural point for a reversal in normal times (though these are hardly normal times.)

The DJIA has leapfrogged its 2.24 and .500 but now faces its purple channel midline at 24,700ish…

…and COMP has dispensed with its .618, SMA100 and SMA200……while RUT reached important overhead resistance yesterday.As expected, USDJPY has dropped through support following its death cross… …which, along with EURUSD’s pop… …has contributed to DXY’s channel breakdown.Should DXY drop through the red TL and potential flag pattern and expanded channel bottom at 99.26, it would be a drag on stocks.

Gold continues to levitate, with the .886 still the most likely move.Oil continues to sag, though we’re seeing some  interesting games being played with indices and ETFs that should produce a rally by taking pressure off the front month. I’m happy to be on the sidelines following yesterday’s tag of the 12.22 target or the overnight tag of out 10.99 target. RB has held up remarkably well (except for that not so minor indiscretion last week) and should test the red TL again soon. If it breaks down, we could retest the .236 line, currently around .56.  If the TL holds, it could easily reach .78.We’re seeing a little movement in the bond market, with the 2Y dipping back towards 20 bps… …and the 10Y holding steady… …which has taken the 2s10s back up to the yellow TL and measurably closer to either a bearish reversal or an even more bearish breakout.ZN continues to hold its 1.272… …with a series of higher lows and higher highs following the Mar 9 spike.To sum up, the bond and currency markets hint at a reversal as soon as today. But, it would be unusual for stocks to take a dive the day before a Fed decision/press conference. For swing traders, the most important support is the SMA10 at ES/SPX 2818.

GLTA.

UPDATE:  3:30 PM

Hmm…not exactly the path the bulls had in mind.

VIX bounced at the 1.618, short of the SMA100 which is now at 29.99.  It also puts VIX safely above the purple midline visible in the weekly chart – important support. This bodes well for equities’ downside case and a potential top at today’s highs.

The USDJPY dropped through horizontal support which with EURUSD’s sharp reversal allowed DXY to catch a bounce. Not sure if CL’s bounce is mattering much to equities right now. The bearish case: we’d want to see ES back off to and below the SMA10, about 2814.85 right now.