Pre-Market

There wasn't any earth shattering news in the overnight session, Italy doesn't seem to be any closer to a coalition government as Beppe Grillo (who will work with the 5-star movement, but none of the other major parties) ran on a platform of expunging career politicians like Bersanni and Berlusconi. Italian President Napolitano is considering stepping in if Bersanni can't form a coalition government and appoint a new (non-political) Technocrat government led by a new non-politician. Perhaps Goldman Sachs actually does win after all? And here I thought this was a defeat for Goldman's tentacles! I'd bet it would be someone from Goldman, anyone want to take the other side of that bet?

In other EU news, Q4 GDP's second revision came in as expected, -0.6%, however what was unexpected was Q4 Exports which fell by .9%, the largest decline since Q1 of 2009. The EUR/USD is fairly flat, it looks as if it may test the $1.30 area again ahead of tomorrow's ECB conference.

In FX land currencies have been quite dull with perhaps the exception of the AUD/JPY, as I said last night, a recently falling Yen seems to be one of the short term keys to market movement, I have a feeling that it will find a support level soon though and remain in a transitional flat period, rather than falling (which helps the market in most respects).

Those who are surprised by the market higher this morning before the open on a non-news night like the overnight session shouldn't be, this was the entire point of what I talked about all last week and why I said they, meaning the locals on Wall St. need the Dow to close above the record high, not just move through it intraday, this is what brings retail in to the market, this is what bids up the market as they hear the headlines and move to their computers to buy, buy, buy and head off to work. This is the entire scheme I was talking about last week because it gives Wall Street two things they need to move any positions, higher prices and demand, in a low volume market, demand is the most important thing for them to make any moves-the question is, what moves do they make with such demand?

It looked pretty obvious as to what moves they were making yesterday in to demand and higher prices, see last night's post.

I'll post futures next, the important thing is the 5 min charts are in that really ugly negative divergence, the one we have been buying puts and making 50+%