Today should be all about whether the FOMC can stick to its oft-repeated stance that they’re not worried about inflation and interest rates. They way things look this morning, the market isn’t buying it.

And, there’s no reason it should. With yields continuing to push through resistance, the writing is on the wall.Rising rates might not affect all those megacap companies that can and have borrowed all they need at historically low rates or issue stock at inflated multiples. But, they will affect nearly every other segment: small and mid-cap public companies, small businesses, individuals with credit card debt, home buyers, car buyers…the list goes on.

Unless oil and gas prices come down sharply in the next 30-45 days, push has come to shove. This morning’s EIA inventory data will attract extra scrutiny, as it should. If the oil/gas rally is to end, we should see some decidedly bearish signals.

continued for members…

SPX is right at the cusp of busting its H&S pattern – though ES has managed to avoid it thus far. The SMA10 is now clearly above the SMA20, so that could provide some support for the algos.

We’re seeing VIX bounce a bit, avoiding the daily tag on its falling red TL as we head into the open. The key will be what happens after the open. CL and RB are both off, with EIA inventory data due out this morning. If the 2014-2016 playbook we’ve been discussing is in fact dusted off, we should see VIX break down much more and USDJPY break out in order to offset falling CL/RB prices. This would be net positive for the USD, and the EURUSD would break down – at least until the inflation scare is over. UPDATE:  10:35 AM

EIA inventories came in as a build in oil and gas – well above expectations. This was in contrast to API’s draw in both.

RB is off a little over 2% and CL a little over 1%. And, not surprisingly, ES is dipping below that little TL of support.USDJPY hasn’t reacted much yet, but it shouldn’t move much unless stocks really start to break down.

Likewise, VIX is content to sit at the day’s highs.UPDATE: 3:45 PM

Powell’s presser offered little of any value other than the fact that he didn’t really want to talk about higher interest rates.

No surprise, but stocks bounced back up to new highs on a collapse to new lows on VIX.

USDJPY didn’t continue rallying because VIX had things well in hand. CL didn’t break down yet… …but RB broke down plenty – getting a nice start for CPI purposes.