Overnight

Overnight the Chinese started a sort of very extended State of the Union address in which it has been noted, China recognized housing inflation and hot money flows as an economic threat, they have set their economic growth target at 7.5% for the second year after last year it was lowered for the first time in 8 years.

It was economic events in Europe though that has the market giddy, the Dow looking to break it's all time nominal high (recall last Thursday I thought this was a very likely probability-Friday would have been the best day for it though to let it sink in to retail's head over the weekend). The economic beats (unlike yesterday's misses), were modest and unlike the manufacturing PMIs that came in worse than expected last week, the Service PMIs came in better than expected except for Spain which was significantly worse and Italy which was modestly worse, both due to a spike in unemployment.

The Composite Euro-zone PMI came in at 47.9, up from 47.3, but still in contractionary territory, this sent the EUR/USD spiking higher, but it's lost a lot of that move since.

While the Futures divergences from last night don't look as bad right now, they are still there and I suspect they will worsen as the morning burns off, these re the same signals that we have taken about 15 call/put weekly trades with and have only had 1 loser with.

 ES with the European open at the green arrow-1 min w/ a slight negative

 ES 5 min still in the negative zone and starting to turn back down, we'll see where it ends up after a.m. trade

 NQ 1 min looks worse...

 NQ 5 min also looks worse.

As does the AUD/JPY

Should be interesting, Dow new highs and then....