Futures tanked overnight on news of Israel’s rocket attack on Iran, only to recover all their losses as we go to press. The latest retaliation is being characterized as a tit for tat.

But it’s easy to imagine the Plunge Protection Team working overtime to calm markets by hammering VIX and WTI back down from their overnight highs.

Meanwhile, SPX came within 1.89 of our 5,000 target yesterday, testing support that continues to be quite important.

continued for members…. Note that VIX came within 0.44 of our upside target but is back down below the red TL from Mar 2023 – currently at 19.75ish.Currencies initially reacted, but have since calmed down.

Not surprisingly, the USDJPY rebounded at exactly the moment… …that the NKD reached our 36,770 backtest target. Net effect on the DXY was negligible.

CL and RB have given up all of their overnight gains and are actually down on the day. And, the flight to safety was almost nonexistent, with 10Y yields off less than 1%.It’s hard to suss out how much of the rebound will be maintained as we go into the trading day proper. After all, it is OPEX.

Although I believe we’ll get a bounce here, continued caution is warranted.