A.M. Observations : Cycle is in Stage 4

Technically the cycle that started off the 10/9 lows and went through stage 1- accumulation, stage 2- mark-up, stage 3- distribution, now appears to be solidly in stage 4 - DECLINE.

ES futures were down as much as -10 points less than an hour ago and are down around 8 points right now.

There is no macro data sending futures lower, there's no news, this is the cycle and we've seen the distribution warning of this as well as plenty of indicators (leading and otherwise).

The Yen gained more ground overnight as I suspected in last night's observations and daily wrap which didn't help Index Futures. Last night I also said near term the $USD was tricky, it has been in a sloppy lateral trend so it wasn't so much tricky as just sloppy.

Crude which we have been looking at as a short to sub-intermediate term bottom that just needed a little wider base, is now starting to make that move up thus far and gold has been heading higher in the overnight session.

Treasury futures are rounding upward, I don't think this is the end of TLT's base, but I do think it is likely part of it.

We'll let a.m. trade burn off, strange how bullish retail was yesterday when none of the market manipulating/supporting assets were working anymore, but isn't that just about always what happens at a downside reversal?

There should be some interesting picks out there we'll take a look at, most of us still have the trading shorts opened as the cycle topped so trade management will be important.

After a.m. trade burns off, we'll see how bad this really is, it hasn't looked good for nearly two weeks although the market was able to maintain the lateral chop and a few new highs by a fraction of a percent.