Opening Indications Dull

So far the FX and Futures markets' open has been pretty unremarkable, there's a very slight drop in NASDAQ and S&P futures, certainly nothing notable; in the currency markets the EUR/USD, EUR/JPY, AUD/JPY and several others have opened unremarkably as well, a slight gap and the filling of the gap in most cases.

Now that the Sequestration is in effect, the sentiment should be interesting, I imagine increased volatility, but I think the market is going to be more forward looking in its fears, from politics in Europe and specifically Italy to the US and events that are far more worrisome than the sequestration such as the end of March when the funding mechanism called the "Continuing Resolution" expires, if the Senate doesn't pass a budget by mid April, the debt ceiling will be re-instated. The debt ceiling suspension expires May 19th, by mid July the government would have no funding and be automatically shut down.

 I found volatility interesting on Friday, specifically futures trading up while spot was down and that rare moment or glimpse of what appeared to be something important in accumulation of volatility futures. I have some gut feelings that we will be in for a few surprises, but I can't quite put my finger on it at this point, perhaps the market will have more to tell us, for now though, it doesn't change any plans or outlook/analysis, in fact I believe our analysis over the last several months has led right to this moment in not only the market, but the economy.

As I often mention, changes in character leads to changes in trends, Friday obviously was a pinned market, I do wonder what it would have looked like if it were not an option expiration day.

I'll monitor the futures and FX markets tonight, should anything change, I'll let you know, otherwise we'll take a look at pre-market indications.