A.m. Update

I'm going to keep this pretty short and to the point. There were some events overnight, the German IFO Business Climate Survey came in soft for the 5th month in a row. Europe is trading flat with a negative tone in Germany. China was up overnight along with the Hang Seng, but the Nikkei was soft.

German 10-year Bunds hit a -1% yield on the IFO business sentiment survey, although that appears to be linked to ECB front-running in anticipation they'll do public QE, which was pretty throuroughly doused over the weekend.

In any case, yesterday's price action was very similar to that of a head fake move Tuesday on Monday's accumulation, these were the two days identified last week to gains some strength for a deeply oversold market breadth correction that has only gotten worse. Late yesterday it looked like there was pretty good confirmation of a head fake move which is a concept seen about 80% of the time, no matter the asset, no matter the timeframe, although they are proportional to the timeframe they occur in as the August cycle's head fake move lasted a week, whereas Mondays would have lasted about half a day yesterday.

The bottom line is breadth is so bad right now, it's hard to believe this market is still standing, if it can't bounce here, I doubt it will be standing very long and I only mean corrective bounce to even our some of the breadth lopsidedness, although I expect it to continue to deteriorate as we move forward. However if this market can't get an oversold bounce or correction going (breadth based), then as I said Friday, it's big trouble for the market which is fine for us, it just doesn't allow us that extra time to enter a few choice short set-ups that need a little market cooperation, I've been highlighting them.

As I said Friday, the week before I thought now is the time to determine whether you are looking for the best entry or taking a great entry and getting market short exposure, this Friday I said I believe that time has passed, it's time to get exposure, I still don't want to chase anything and we are still in a great area for a lot of the assets we are following, but I think it's more important now to take action and with breadth this bad, you may have to take action on some days that are emotionally very difficult to do so, meaning very strong, volatile squeezes, they should be popping up although this market's character is clearly changing to the very bearish, it's just not clear if we have slipped over the edge and that's why it's so important the market make an upside attempt in my opinion, TODAY.