The producer price index missed this morning, coming in at -0.2% versus consensus and prior read of +0.4%. Core also missed at -0.3% versus consensus of +0.1%. Although the market has certainly staged a V-shaped recovery, someone forgot to check with the economy.

Not to worry, because Gilead was quickly out with a press release reiterating the virtues of Remdesivir. The algos like this kind of stuff, especially when faced with otherwise depressing headlines.

More importantly, VIX took a well-timed dive to just below its 10-DMA. The algos love this kind of stuff, and suddenly futures are back in the green.

Don’t get too excited. It won’t last.

continued for members…

Oil and gas joined in the algo-boosting efforts, recovering from sharp overnight losses.  Though CL has clearly broken down.

As discussed yesterday, RB could still make a run for its SMA200 as long as it remains above the red TL. USDJPY is selling off as expected.EURUSD and DXY continue to mark time, trying to placate the algos.This leaves SPX and ES with a choice: go with the VIX signal or pay attention to the broader economy and what is sure to be disapointing CPI data on Monday.

ES got another bounce off its SMA10 this morning and, like SPX, is back above the yellow channel midline at the moment.  I don’t expect it to hold.

As we say pretty much every day, VIX remains a wild card.

The 10Y continues to warn of additional downside for stocks – nudged lower by the disappointing PPI. The 2s10s remains broken down, reaching as low as .431 overnight.

more later…

UPDATE:  3:30 PM

VIX is off 6.66%……and will soon put SPX above its July 7 highs – running a few stops ahead of the weekend.SPX is also approaching the top of its falling purple channel.Note that ES has reached the red channel top, with the white channel top only slightly higher.

I would not chase stocks here, as pretty much everything else which has triggered algo buying is in backtest mode.

Examples: TNX, CL, USDJPY, 2s10s…

And, though COMP is still levitating, DJI is still languishing below its SMA200.CL’s spike should be like all the other intraday rallies. It should fail after hours and start the next rally from lower prices.EURUSD is doing the same thing – showing an intraday rally even though it’s not making any headway.