It doesn't take much to figure out what the market is following and that is the same thing that moved it last night and that's currencies, specifically the EUR/USD and specifically related to the Italian elections, however the Yen is playing a role as well. I'm less interested in the fundamentals and more interested in the market's reaction to them.
Looking at leading indicators so far (this is a bit early in the day), they seem to confirm the same sentiment I posted earlier.
The CONTEXT ES model...
ES as usual recently is rich to the CONTEXT model, that may moderate a bit based on some early indications and of course the market filling most of the gaps.
High Yield Corp. Credit is holding on better than the SPX in this early snap shot (1 min chart) which suggests that the market bounce off the gap fill, still the longer term view here is of severe dislocation in credit, the bigger picture not being good for the market.
Junk Credit is also doing better than the SPX this morning as of this capture.
The SPX and Euro moving nearly tick for tick as Italian election results come in.
The $USD moving nearly tick for tick in their inverse correlation as the gaps are filled.
The Yen also moving right along with the SPX or the SPX with the Yen according to their correlation.
I'll show you futures next.
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