April PPI joined CPI in reflecting the severe economic pressures building in the US, dropping 1.2% YoY. Even stripping out food, energy and trade, producer prices fell 0.9% MoM and 0.3% YoY. The cost of goods fell 3.3% MoM, the biggest decrease since 2009.
Powell’s comments at the Peterson Institute will get underway shortly. A preview of his prepared statement suggests his mood will be somber and his optimism tempered by the realities of the pandemic.
Algos are anxious to hear whether he can promise anything more impactful than “whatever it takes.” The overnight bounce has probably run out of steam.
continuing for members…
VIX has plenty of upside potential.
The SPX picture:
USDJPY has backed off its race to its SMA200 and is threatening to break back into its falling white channel.
EURUSD is performing its daily head fake…
…as DXY performs its. 
Oil was off overnight but has climbed back to near its 26.05 upper bound – its Feb 2016 lows. It remains heavily “managed.”
And, RB has dropped to backtest its Feb 2016 lows.
AAPL, poster child of the March 23 bounce, had trouble making new highs yesterday. It briefly pushed above its .886 before failing again.
This breakdown didn’t go unnoticed by the broader market. The question facing AAPL now, assuming the rising red channel breaks down, is how far the stock might fall. Previous failures at the .886 have been significant. The last time the rising white channel top failed (Feb 24) things got very ugly very fast.
On the bond front, the 2Y has fallen back below 17 bps but the 10Y fell even more – pressuring the 2s10s back down to 50 bps – a slightly bearish alignment.
UPDATE: 11:26 AM
ES is about to complete a little H&S Pattern that lands it at exactly where it needs to be for SPX to tag its 2.24 at 2703.
It should gather steam when VIX breaks above its SMA20.
UPDATE: 3:50 PM
Lots of catalysts today, with Tepper’s and Druckenmiller’s comments piling on to Powell’s to shake a bit of confidence out of stocks.
We’re getting a last-minute selloff in VIX…
…so it’s unclear whether SPX’s channel will break down here or in the morning.
It has made a lower low, but ES has not – and doesn’t have the same channel support either.
USDJPY managed to hold the backtest and the little red TL.
Though CL held its own, RB is headed for our backtest target at .81.
FWIW, AAPL’s little red channel did break down — though the white channel top is still intact – i.e. a mixed bag.
Remember, we’ll get initial claims in the morning as well as retail sales and consumer sentiment on Friday.