Fed officials managed to talk stocks higher yesterday, but the underlying question remains: have they already lost control of inflation and interest rates?

At 3.4%, Durable Orders more than tripled expectations. While GDP, initial claims and prices all came in at or better than forecast. Not surprisingly, interest rates shot higher – reaching key overhead resistance as did WTI.

This is quite possibly the Fed’s last chance to avoid a real mess in the bond market.

continued for members…

ZN is approaching the white channel midline.

…which is significant support for bond values.  Note that TNX has tested its Sep 3 lows and is threatening to break out past them. At 1.54 or so, it would break back into the broken white channel. Oil and gas remain the prime drivers of this move.  Oil is still backtesting the channel from which it broke down in 2018.And, RB has retraced .886 of its 2019-2020 crash.USDJPY is shooting higher…which might drag DXY along with it…

…except that EURUSD broke out. This leaves DXY neutral on the day.Though GC and SI are still stumbling thanks to ZN’s additional decline and in spite of the inflationary rhetoric.

On the equity front, SPX’s comeback yesterday merely backtested the purple TL from the Mar 2020 lows – but also put it back on top of its SMA10.No such backtest for ES, which is back above its SMA10 as well as the equivalent TLs. Assuming VIX will get hammered a bit more, ES still appears to be focused on its 3.618 and the 4,000 mark. VIX managed a “breakdown” yesterday, and could very well repeat the exercise today while also dropping back below its SMA10 at 23.11.

UPDATE: 1:45 PM

Once again to the channel bottom……and, once again, a reversal at an IH&S target.USDJPY isn’t helping much…As we discussed earlier, a breakdown here would do some serious damage!

UPDATE:  2:50 PM

In the end, we’re all chartists…

In response to Tim Melger’s question re XLE… you could certianly make an argument for the white midline and 200-weekly average at 56ish. But, first, you’d need to get past the TL off the 2018 highs which also happens to be a channel top. If I draw the rising white channel based on the lows instead of the tops, we’re already at the channel midline.