A.M. Observations

Good morning,

So far, with the exception of the additional news that Emerging Markets are seeing dramatic outflows (RISK OFF) across the world overnight, everything else is as we expected Friday afternoon and especially last night thanks to our friend, the USD/JPY.

The carry pair gains last night as we showed with Yen and $USDX futures. Remember this lifts the market even as EM markets are getting crushed, we've opened within that range I drew last night.

 We have some light intraday distribution, remember NQ futures stayed strong overnight relatively speaking very strong, but we need lateral chop so it will be a series of corrections to keep a range laterally as explained last night.

This is the ES 5 min chart, the positive divergence has built overnight, ES has gained overnight, but remember it's about that sideways , zig-zag range or a "U", "W" over the next couple of days.

 ES 1 min also showing some steering divergences 1 min to send prices lower or halt them a bit, an accumulation zone needs to be formed, that can;'t happen if prices run away to the upside and they can't run away on their own, without the range.

Even gold (above) fell as expected last night and 30 year futures are gaining a bit.

Everything is EXACTLY as imagined Friday, exactly as described right down to my drawing last night.

So far so good. We need to be patient, try to trade a choppy lateral zone is a meat grinder, but there may be some set ups here and there. We want to confirm our theory, get in where it makes sense, be patient and wait for that set up to come to us.

So far, while others are talking about what's happening, we have been predicting it days in advance to prepare so I'm happy.

We do need to confirm that a base is and continues to be built rather than a temporary consolidation.