Pre-Market

First as you already probably know. it was horrible in Asia overnight with the Nikkei down 6.4% which makes Goldman's long Nikkei trade a bust, stopped out in 3 days at a very large loss as expected.

Shanghai saw selling, down -2.7% as did most of Asia, Europe wasn't much better off. 

The World bank cut growth forecasts for China and the World which are one and the same as China is the marginal growth engine for the world.

US retail Sales were revised lower for the second month in a row, but the headline number was a beat, printing at 0.6 vs consensus of 0.4 which will likely be revised lower next month again.

Initial Claims also came in at a beat of 334k vs consensus of 346k, this is the "good is bad" market, but that's not what will move the market if it moves today, that won't matter.

Now for the important stuff.

Here's ES overnight, at first look, very ugly...

 This is ES overnight breaking under 1600 as I mentioned there would have to be or likely would be a head fake move in any tight "U" turn, 3C went slightly negative on the Initial Claims and Retail Sales.

 This is the 5 min ES chart, leading positive, very strong.

This is the USD/JPY, not a lot of help, but it's generally in the right direction with a current 1 min negative, yet the Yen's chart looks set to move lower, it is the $USD's chart that looks a little tired on the upside.

The AUD/JPY though, as suggested, has come roaring to the rescue.

This is the "U" bottom I spoke of last night, then I said the following...

"If the Index futures are indeed building a rounding bottom overnight, then they are no different than any other asset at any other time, they should see a head fake move below the range that is pretty much established."

Well there's the "U" bottom and a clear head fake move under 1600 that distorts the "U" shape, that's the head fake move I spoke of last night. Interesting huh?