Has he really turned dovish or did we just misunderstand him? To hear Neel Kashkari tell it, the Fed is nowhere near a pivot. This morning’s update will be posted after Powell’s 12:30pm speech before the Economic Club of Washington.

continued for members…

Despite being pitched only softball questions, Powell did manage to slip in the notion that additional strong economic surprises would result in additional rate hikes.  The initial VIX-fueled rally (reversal off the channel top)… …was thus reversed and ES made it all the way back to its SMA10 and white channel bottom where (no surprise) it bounced.

The result is that we’re no closer than we were to a solid forecast. SPX et al have broken out just like DJIA did back in November.  While we can make a great argument for further downside, we need to see the rising white channels break down first. And, for the decline to get ugly, we need to see DJIA drop through its SMA200. One thing I should point out…  The XLU chart that first hinted at the cycle happening in SPY suggests the low won’t happen for another week. Given that we still have lots of economic data in the next two weeks, the lack of a sharp downturn by tomorrow isn’t necessarily a deal killer for bears.

It wouldn’t surprise anyone if betting on a decline required shorting over a weekend – potentially this long holiday weekend.

Having said that, the bulls are currently still in charge – with DXY running into overhead/backtest resistance… …and CL/RB both getting a strong backtest bounce….…while VIX treats its channel top like an electrified third rail.

Stay tuned…