As we suspected, Wednesday’s lows weren’t enough to generate a sustainable bounce. We’re seeing the aftermath of that premature technical bounce this morning. Our long held bearish position on EURUSD, for instance, is finally gathering a little momentum.The challenge for bears remains SPX’s 50-day moving average, currently at 5105. If VIX can remain below 18.50, then we could see more meaningful support for equities. If VIX surges past that long term trend line, then the bears could finally have something to celebrate.

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The other currency charts show a strengthening DXY – as it should be with US inflation still robust in contrast with EU economic weakness.

Note that GC and SI are approaching our next upside targets. CL and RB are on the rise, again, against rumors that Iran is about to retaliate for Israel’s bombing of their embassy in Syria.

Treasury yields are broadly lower on the resulting safe haven flows.

UPDATE: 10:32 AM

Given VIX’s longstanding hesitation to break out or even get overbought…

…don’t be surprised if SPX stops at the purple neckline and remains above it until OPEX on Apr 19, at which point the SMA50 will have nearly caught up to it.  It would be the most frustrating outcome for both bulls and bears, which is typically the most rewarding outcome for market makers.Alternatively, SPX could rip down to today’s SMA50 value – currently 5111 – and rebound into OPEX. Either way, there’s a decent chance that SPX closes around that red target at 5150 at or near OPEX.

As always, the key is whether or not VIX can remain below that trend line from Mar 13, 2023 – currently around 18.50.