Futures are off moderately in the wake of the ECB’s decision to impose a 75 bps rate hike – its highest ever – on an economy already reeling from spiraling inflation and weakening economic activity.

continued for members…

The big picture for equities hasn’t changed. Both ES and SPX are trying to work their way higher after backtesting the purple channel. If the bounce fails, then the backtest will too.

Note that COMP broke down below the little red TL and backtested it yesterday. One key will be whether VIX is able to move out of this trading range.The euro has barely moved, even after the rate hike. It certainly hasn’t gained any ground.

Gold and silver are still idling and BTC is slowly sinking again.

Oil is getting what appears to be a counter trend bounce, with a death cross and the SMA10 back below the SMA20. On the other hand, RB has just about reached the 2018 highs backtest target and could very well get a bounce off of it. It’s quite important, as the 10Y is still watching for clues as to inflation and remains on the the brink of a breakout.

UPDATE: EOD

It might have been an ugly day, but…

That’s right. VIX to the rescue again. And, FWIW, USDJPY is still “broken out” above the .886 and 1.618 – at least enough to convince the algos to look on the bright side and ignore the newly hawkish Fed. You old timers – and, I mean no disrespect – will remember that this same phenomenon kept SPX elevated for a good part of 2015 and 2016 when USDJPY peeked above its .618 at 120.11 (the yellow arrow below.) It eventually fell apart and SPX plunged anyway – though (in a remarkable coincidence) only to the predetermined Fib support at 1823 – the same 1.272 it ignored on the way up.

For us cynics, it’s pretty clear that the BoJ cares a whole lot more about the Nikkei than it does the Japanese consumer who has to deal with this crap.

Hmm, where else have I seen that pattern?