A.M. Update

Volatility has picked up worldwide with the Shanghai Composite down -3.47%, most of the rest of Asia was red, Europe is res and while a lot has to do with Greece, each region seems to have a little something different baking in the oven. However there can be no doubt from all the talk that everyone is starting to think of this weekend as the Greek's "Lehman moment", with EU emergency meetings scheduled, apparent deals agreed to which would put capital controls in effect as early as this weekend in Greece and what seems like a public (Greeks) that aren't too happy with the current government's job. As I said before and as it was with the Lehman era, it wasn't the horrible stuff you knew was coming, it was the stuff no one imagined it would lead to in areas no one imagines would be effected...How much more so with a country going in to default?

In any case for our purposes, I wanted to see price action come down to yesterday's intraday lows, that happened overnight as I suspected it might in last night's Daily Wrap,

ES 3 min with price coming down to yesterday's intraday lows overnight.

Now I'm hoping price will move there during the normal cash market hours and we can get the data needed from that area.

I suspect the 150-day wasn't tested twice out of coincidence, I think Wall St. knows traders are watching that level as a last stand before the 200-day and I think a bounce off that level ala-last week and a slice down through it would likely catch a lot of stops.

Just to be clear, I do think we get a bounce, internals agreed with a 1-day oversold condition yesterday as well. The bounce may evaporate by tomorrow's F_O_M_C policy announcement or it may be helped by the knee jerk effect (we'll get to that later), but I think that's the game and I'm looking to likely exit VXX calls at yesterday's intraday lows.

SPX-500 daily with 150-day sma is as good an area as any for a bounce, stops should be lined up below making it a profitable area to slice right through on the downside of the bounce.

I'm just hoping we get a move back down to the area in the cash market, which I suspect we will, we may not be there long though.

As for the big picture, absolutely nothing has change, we are talking about regular, corrective bounces above, something you'd see in any market.