Another day, another ramp job.  Yesterday’s oil and gas price recovery wasn’t enough to help stocks break out.  But, VIX’s dip below horizontal support was more than up to the task.There’s just one problem – inflation. Ignore the seasonally-adjusted PPI poppycock and look beneath the hood.  Petroleum products rose 21.7%.  That was an understatement, but at least closer to reality.A casual glance at crude prices reveals the YoY difference was closer to 30%.  The real problem comes next month, where the YoY delta is currently tracking 42%.  Then, there’s June.  The average price of $45/barrel is about 55% below current prices.In that light, yesterday’s decision to ratchet up tensions with Iran — the world’s fifth-biggest oil producer — spells economic trouble.

continued for members…

ES has, for the moment at least, broken out of its falling channel.  Bears’ only hope lies in the price action of Mar 12-13, when prices popped out of the newly-forming channel on an intra-day basis.As we’ve discussed, SPX’s falling channel has a completely different look.  Here, the bears’ hopes seem to be pinned to the fact that it hasn’t yet rejoined the rising white channel from which it broke down on May 2.  It tried, on May 7, but has been clinging to the underside of the channel since then.

The rest of the charts:

New highs for RBOB.

And, DXY closing in on a channel top — though, note that prior tags in April and May of 2017 didn’t quite reach it.The yield curve is still bearish as can be……as the 10Y tags 3% again.COMP is still delaying the inevitable, as its SMA200 continues to rise. While DJI doesn’t seem to be in any particular hurry.USDJPY is following the bullish path, giving to the cause… …while EURUSD is beginning to look quite oversold.UPDATE:  3:25 PM

Coming into the closing half hour… I had really hoped to be wrong about VIX, which just tagged its SMA200.  SPX is almost to its channel top/SMA100/2.24 extension at 2703ish.  ES is still “broken out”, despite SPX not being. DJI still looks like it isn’t entirely sure.Bottom line, we’re still in limbo.  Though VIX might have bottomed, all it would take is a strong spurt by USDJPY to get SPX up past 2703.I still see downside potential, but would hesitate to hold a huge position one way or the other unless you can manage overnight gap risk or hedge.  Traders have a built-in stop level at the 2.24 extension (2702.78) so a short position isn’t all that dangerous.

Personally, I’m quite bearish. This feels a lot like insider/dealer positioning to me.  But, if SPX pushes up through 2703 on big volume due to, say, a huge spike in USDJPY or plunge in VIX, I’ll change my tune.

GLTA.