Pre-Market

Last night I posted, One Last Look at Futures before turning in around midnight. The Yen was at an overnight or new low (For this week's trade-not a new low overall) and despite Japanese Central bankers / officials at the BOJ doing a lot of talking to try to move the Yen with extra help from  the Nikkei reporting that new easing may happen earlier than expected under Kuroda, and the earlier news that the BOJ may even monetize derivatives, the Yen still followed the positive divergence in the single currency future to a higher level.

 The 1 min chart shows the low that was in overnight when I posted the look at futures last night and the Yen moved higher since on the positive 3C divergence that has been building there.

Here's another look as the Yen seems to be going through the process of an upside reversal (rather than an event as reversals are rarely events and are more of a process). So despite their best efforts to keep the Yen down, someone seems to be buying it, my guess... FX Carry Traders are closing out Yen based Carry trades (this goes back to market breadth being weak, odd moves in the VIX, 3C distribution patterns, etc).

As mentioned at the end of last night's post as I posted the FX pairs, "USD/JPY, this may be interesting the way the single currency Yen futures look"

The USD/JPY fell almost 100 pips overnight!

The area of interest I marked and a nearly 100 pip drop overnight!

This pushed the Nikkei 225 in to the red to end 8 days of gains.

As talked about this weekend in China's warning to Japan, Chinese officials warned the world about a Global Currency war and then went on to drain more liquidity from the Chinese economy overnight using repos, remember after 8 months of injecting money, China recently turned 180 degrees and started draining liquidity using repos. Overnight this sent the SHCOMP -1% lower for its 4th consecutive loss-as I said, China will NOT have the world dictate their inflation even if it means (to the world's detriment) that the primary driver of Global growth douses their economy to contain hot money flows from worldwide central bank easing and devaluation, especially when considering this new pig virus problem which has seen over 3300 dead pigs floating down the Huangpu River, this may be the start of something miuch worse which may contribute to the worst kind of Chinese inflation, food inflation as it is synonymous with social instability.

**By the way, the Huangpu River is the water supply source for Shangjai, even though initial tests have ruled out any disease that may be transmitted to humans, the Chinese have never been forthcoming about things of this nature, can you imagine the repercussions?

I Digress...

As to the other JPY crosses...

 The AUD/JPY saw more volatility which often precedes a top and was what I was trying to point out in last night's capture such as the one below of the AUD/JPY...

 This is the chart of the pair from last night, trade hasn't gotten any better as you can see above, even if it didn't lose 100 pips overnight (yet).

The EUR/JPY is somewhere between the AUD/JPY and USD/JPY with more volatility and a decent plunge.

European data was mixed with Greek Industrial Production down -4.8% vs 0.9% previously, German CPI printed 1.5% higher (at consensus) while Spain sold $830 million more in 6.5 month bills (consensus $5.5 billion expected), Spanish Yields on the bills fell slightly while Italy $7.75 bn auction of 1 year bills saw the yield rise. UK Industrial Production fell -1.2 on consensus of a 0.1 rise and down from +1.1 previously while UK Manufacturing fell -1.5% (consensus unchanged) as the BOE is expected to engage in more QE once Carney takes over at the BOE-CUE CHINA'S RESPONSE in 3, 2, 1....

In the US, the next headline is the SPX hits a nominal all-time new high which as of yesterday's close was 9 points away. Does anyone find it interesting that the SPX WAY outperformed the Q's that needed an AAPL dividend rumor to get the Q's in to the green while the R2K couldn't make it green no matter how hard they monkey hammered the VIX, even at the close? I'd say the market is weak all around, but all the attention is being thrown at the SPX as it is the next and only hope for a new market headline.

As for last night's futures which I almost didn't post...

ES stayed choppy, holding on to as much as it could after being pushed toward it's new high...

 ES's new high for this week printed yesterday on everything they could throw at the market to move it higher.

NASDAQ futures fell on the negative divergence, as I showed in the last post there was a fairly large intraday 1 min positive divergence this morning in NQ which has sent NQ higher, although the QQQ are still yet to close the opening gap down as it appears they got as much mileage out of the AAPL dividend rumor from yesterday-perfectly times to push the Q's in to the green after spending most of the day under Friday's close, there's definitely a foul odor from that AAPL/QQQ push which was all rumor (AAPL dividend declaration) .

 Yesterday's NASDAQ lever-AAPL dividend rumors...

AAPL yesterday and this morning... It looks like they got all the mileage out of AAPL they will get thus far as it seems distribution was evident toward the close and this morning as AAPL is in the red right now as Jeffries so BRAVELY "Slashes " their AAPL target to $420.

You saw last night's futures for the averages, even with an intraday positive divergence in the NASDAQ, RUSSELL 2000 and SPX futures, all of them are red right now. Believe me, I think they'll try hard to get the SPX 9 points higher, but why is the market struggling so bad right now with Dow all time nominal new highs just a week ago and the SPX near them? 

I'll bring you more on the futures as they develop, but I'm glad I did put them down in screen captures last night, we may be revisiting that post very soon.