My favorite Trumpism of the week:

“I’m doing deals and I’m not being accommodated by the Fed,” Trump told the Post. “They’re making a mistake because I have a gut and my gut tells me more sometimes than anybody else’s brain can ever tell me.”

If Trump could just shut his big yapper for a few days (very difficult, I know) he’d probably find that the Fed is fairly unsure about additional rate hikes.  But, by targeting Powell and the gang with incessant criticism, he paints them into a corner.

Now, if they slow or stop the hikes to accommodate slowing growth and lower inflation, they risk the appearance of taking orders from Trump.  The repercussions would be devastating to the Fed’s reputation.  If they stick to their hiking schedule, they risk choking off whatever momentum the economy might be able to muster.

Meanwhile, the quite overextended DXY continues marching higher…… despite the EURUSD’s unwillingness to penetrate the channel backtest.Combined with VIX’s deft dip below its most recent straw-man trend line (but, failure to drop through its SMA50)…… it’s enough to send futures through their SMA10 which had previously represented resistance.  Can it hold?  A great deal depends on what Mr Powell has to say today.

continued for members…We’re still in a holding pattern, despite the meltup.  Note that SPX will top its SMA10 and the little red TL on the open — a well worn pattern of leapfrogging resistance during the low-volume after-hours.  It is closing in on its 2.24, extremely important resistance.The bigger pattern — in the event algos don’t like what Powell has to say during today’s speech in NY. About the only bearish thing on the charts is ES’ halt at the .786 channel line. The rest of the gang…

A rebound in RB and CL would help stocks but bump inflation higher — so, I’d be surprised to see much action here any time soon. A strong dollar will help keep inflation under control.  A strong USDJPY will help keep stocks afloat.  TPTB know all too well how this works.If VIX’s SMA50 (18.25) can hold today, bears still have a pretty good shot at SPX 2708.  Note that this also represents the midline of VIX’s big, white channel and that VIX’s golden cross remains in force (the big, yellow arrow.)UPDATE:  1:00 PM

Powell blinked, and the market is up strongly.Though, VIX has not broken down.

And, ES stopped at its 2.24 extension. And, COMP remains below its white channel midline.As such, I’d be tempted to fade this short squeeze right here, with relatively tight stops triggered by a drop by VIX through its SMA50 or ES through its 2.24 at 2827.79.  And, I’d be cautious as SPX approaches 2703.62 from above.

The simple takeaway from Powell’s comments is that the unspoken third mandate (prop up stock prices) is more important than the Fed’s reputation.  For the record, I have never doubted this.  But, the fact remains that until VIX breaks down stocks are susceptible to another big whoosh.

COMP continues to appear vulnerable, although the delay has meant a higher low target – potentially 6800.  That same 5.7% decline would equal 23,781 on DJI (its 2.24 extension)… …and, 2566 in SPX (a little beyond the H&S neckline of 2603.) Since we are heading into December, odds are that the market will be higher a month from now.  But, a serious drop in the dollar could really do some damage to stocks.