Stocks slid sharply on Friday following news that tariffs on an additional $200 billion in Chinese goods would be announced today.  We got the usual V-shaped recovery by the close; but, futures are still a few points in the red this morning.

The biggest impact, so far, has been on rates.  The 10Y popped through its triangle and is testing an important channel top while topping 3%.

The 2Y is keeping pace.

DXY is trying mightily to hold the line, but it’s looking iffy.

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It continues to weaken against the euro and strengthen against the yen.

VIX popped a little this morning, but we have to consider the yellow channel bottom (11.65ish) as the index didn’t quite reach it on Friday.Equities are still on the bubble.  While ESand SPX have both broken the TL from last Tuesday, both are still in an uptrend for now.  As we discussed Friday, the trick will be in holding important support.  SPX could close last Wednesday’s gap, backtest the yellow channel line, and test the white channel bottom at 2894.65.

Oil and gas continue to go sideways, bouncing this morning to support stocks in their hour of need. I have to be out of the office all day today.  I’ll check in around noon if anything important is going on.  For now, though, the algos appear to have things well in hand.  Can they be convinced that “trade wars are good and easy to win?”  We’ll see.

UPDATE:  9:45 AM

Going for the gap close?

UPDATE:  10:54 AM

Gap closed, thinking about the SMA10?  VIX is at its channel top, would need to reverse if SPX’s white channel is going to hold.

UPDATE:  3:40 PM

The details of the tariffs are supposed to be announced after the close — leaving investors understandably nervous.  If it were good news, wouldn’t we get it now and get a nice little pop into the close?

Both channels have broken down (incl SPX’s SMA10) leaving the gray channel bottom at the SMA20 as the next line of defense.  If that breaks down, we’re back to the Jan highs at 2872.87.

Note that ES is nearing its SMA10 (2892) which would also be a nice stopping point if they can reverse VIX here.  Obviously, SPX and ES are out of sync re SMAs, so this could just as easily be the line in the sand.