Retail Sales Falter Without Stimulus

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July retail sales fell 1.1% versus -0.3% consensus, reflecting the impact of stimulus payments, Amazon’s Prime Day change, and the general apprehension surrounding the delta variant.

Yesterday’s bad news faded under heavy algo action, with VIX going into meltdown mode……the instant SPX reached its SMA10. The bears will get another shot today.

continued for members…

The big picture for equities hasn’t changed.

If we’re going to get a serious correction, it should start no later than today. ES’ SMA200 has finally reached its 3.618 extension.

FWIW, NKD has broken below the little TL from Jul 19 and, having never risen back above its SMA200, is quite likely to reach 26,463 or even 25,741 in the next few days.

DXY appears ready to reach our upside target… …as EURUSD reaches our next downside target.

USDJPY could be the next wave of downward pressure on stocks.CL/RB are holding on, but for how long? Declining economic activity with rising inflation = stagflation.

But, of course, much will still depend on VIX. It’s back above its SMA10 but the 10/20 is still in a bearish (bullish for stocks) alignment and it has yet to break above the cluster of SMAs around 17.50.For its part, the 10Y is still in position for a tumble to 80 bps. It would help if CL would cooperate.ZN is back atop its falling purple channel top, leaving it free reign for a leg higher. But, GC remains a complicating factor. Recall that its rising purple channel broke down on Aug 6 and it has been backtesting for the past 2-3 days. It topped its SMA10, but still faces plenty of overhead MA resistance.SI, on the other hand, has held up since reaching our downside target on Aug 9. It faces its first real test today as it tags its SMA10.