A.M. Observations

Overnight and where ES/SPX futures are now are pretty easy things to explain, we don't have to go in to Services ISM in China or Europe or even anything going on down under, although there are things happening, it's as simple as this.... The Japanese/BOJ are backing away from all of their recent QE chatter, putting some distance between their recent words and where they stand now.

The EUR/JPY has already discounted more BOJ QE so it has to be unwound and ES is in lock-step with the EUR/JPY...

ES vs EUR/JPY (purple) 1 min overnight.

See what I mean?

So it may be that those signals I showed yesterday of the single currency futures are quite correct, the longer ones and someone had a head's up before the BOJ backed off.

In any case, we still have the other levers from yesterday set up, I'd like to see yesterday's divergence run over, the ADP employment report coming in strong didn't help as the biggest factor for the F_E_D and tapering QE3 soon will be this Friday's non-farm payrolls and the ADP report was good news which is bad news for the market and although it is noisy ands I don't like it, the market doesn't like it beating so close to the NFP this Friday.