SPX’s relative strength index (RSI) has been consolidating for months in a series of higher lows and lower highs. It’s the lower highs that should concern bulls, as they represent an unmistakable pattern of negative divergence that almost always ends in a correction.continued for members…Markets were quite weak on Friday, but the key factor in where stocks go from here will be tomorrow’s CPI print, followed by PPI and retail sales on Thursday.

VIX is back above its SMA200, though has not yet set a new high.

Currencies aren’t doing much to help stocks this morning, with EURUSD backing off Friday’s highs and USDJPY echoing Friday’s lows. Note that it is approaching its SMA200 – often a hard floor for the BoJ. GC popped so strongly on Friday that a breakout seems like a done deal. If it can hold 2162, it has upside potential to at least 2466. CL and RB continue to roll over, and TNX is following suit.

stay tuned…