Pre-Market

I don't think we need any detailed rundown of what happened overnight, the charts from late afternoon have dominated morning trade as we look toward a gap down.

I don't know if professional equity traders have a line on the USD/JPY 6-24 hours in advance, but either that, something else that 3C is showing in late afternoon trade or perhaps simply getting in to the area of maximum pain on another "Weekly" options expiration Friday pin, has seemingly done the trick.

Since I can't do anymore than guess about 2 of the 3, the one I know for sure moves the market has been in position to do so overnight and that's the USD/JPY pair.

 USD/JPY overnight on more JPY strength...

sending ES trending lower overnight...

 Which was built in to expectations yesterday as many calls were closed as the afternoon negative divergences dominate early trade...

Perhaps not the best example, but there were quite a few presented last night with the charts just slightly longer than intraday still calling for more bounce.

Either way I think it works, we get the downside open that was expected and prepared for yesterday, if the signals are there for adding calls in another 1 day hitch-hiker trade, we take them. If not, we have good short exposure built up and we add to that and just enjoy the ride.

There's a method to the madness, it's called being prepared rather than chasing the market and thus far it's working out well as the core shorts are going a darker shade of green with each slight dip in the market while the short term calls are bright green in low exposure 1-2 day leveraged trades.

I think we just continue on that path and we know from last night what the most likely scenario is, the pullback which has started overnight, "if" there's any sign of short term 1 min-2 min accumulation we consider calls, if not, we finish entering shorts which are coming in to their own.