A.M. Observations

I've been looking at some of the data/charts overnight and checking, re-checking just to make sure I'm not overblowing some bias I may be unaware of as we all have them from time to time, but it benefits me nothing to be right about a bearish case over a bullish case, it only benefits me to be on the right side of the case for you. If that means I have to eat humble pie and admit mistakes, I'm okay with that, I'm human, I make them and probably have a fair share, but the bottom line is the weakness I see is unparalleled and its a difficult discussion to write about succinctly as years and years of bias about how Wall St. works have skewed our thoughts, so it's not just presenting evidence, but in many cases it's starting from ground zero in explaining how Wall St. works (underlying trade) and why in some ways, this time is different, but not in a good way.

I think you all have seen the dismal volume since 2009, you know the record margin, you may be aware of who provides liquidity and that they are not bound by law to do so like a market maker or specialist and they can pull the plug in an instant and seemingly have recently. I'll try to get more in to this as I have more time and try to think of ways to make it as succinct as possible.

Futures for all the overnight action are virtually unchanged if not literally from the 4 p.m. print yesterday.

China is conducting open market operations and putting reverse repos in to the system, but with a twist, a fixed rate higher than usual which gives the impression they are managing a tightening patch, it's not over as we might have assumed when they started reverse repos again this Tuesday.

Japan's Abenomics are creating inflation that he wanted, but like the US, in Food and Energy, the two places it really hurts every day citizens while wages in Japan have fell for a 16th straight month.

In Europe German Retail Sales posted a huge miss.

In the US, Initial Claims misses.

Right now though, the most important thing for us near term is planning and execution of positions while maintaining a finger on the pulse of the macro market, I don't think it will change as I haven't seen much like this except in a few Industry groups like Oil under G.W.B. and there's a reason for that which I'll get in to, but right now, I'm more interested in making this information useful.

Gold has been pulling back overnight which is exactly what we had expected with it being a buy at some point as we get positive signals. Crude is a bit jerky even as the USD is rising, also another recent expectation. All of the carry pairs are useless today for ramping the market and I think that overnight strength in the Yen is the obvious reason why so they may try an arbitrage end around, but I suspect protection will be bid making that hard today. We'll see how long the Yen can stay up.

So lets see what's on the menu...