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S&P 500 was indeed sluggish into the FOMC only to welcome the statement – and then the presser came, with accentuated hawkishness that did sink not only stocks but also bonds and real assets. The encouraging reprieve on the long end of the curve is giving way to further flattening, which only highlights tight money circumstances.

In such an environment, the dollar thrives, and another risk-off day is what we‘re on the doorstep of. The encouraging dialing back of Dec rate hike to only 50bp (assigned 57% probability right after the statement), looks history as bond traders are forcing higher yields across the board today.

On one hand, the impact of rate hikes seems to be generating less fear (selling) since the Jackson Hole and Sep FOMC, on the other hand, it invalidates prior constructive moves in bonds, where especially the long-dated ones look to have bottomed in October. It‘s at least reasonable stability if not a modest upswing (or a more decent one in recognition of the slowing economy, which isn‘t yet slowing down fast enough to force yields down on this account) that stocks need for a sustainable Q4 rally – a rally that should still continue, and reach my 3,950-year end target.

Volatility and options activity isn‘t though painting a bullish daily picture in the least – bonds are again doing the tightening for the Fed, and it shows in commodities, precious metals, and finally cryptos as well. Relatively resilient is of course only oil, and perhaps copper can show limited bouts of relative strength here and there too.

When it comes to daily S&P 500 levels, the bulls want to hold 3,710s and see any rebound attempts accompanied by risk-on turns in bonds, and I‘m looking more toward TLT today. Overcoming 3,780 seems a pipe dream.

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