A.M. Update

Good Morning,

It's another Friday, another op-ex pin at max-pain I'm sure, wherever that may be.

This is what I see for our small base from yesterday.

These are price-based targets, however we have SIX different F_E_D speeches today by four different members, two began at 10:15, so I'm assuming there may be some volatility depending on what they have to say, my guess is they reiterate their stance toward accommodative policy which the market (retail side anyway) is likely to take as an endorsement of a "go-slow" approach toward tapering, but nI think the real message is to the pros that are trading in bonds that ZIRP rates will remain in place for as long as need be, thus the trouble recently with the 10-year yield which is just under 3% today.

Index Futures did see downside last night after I had seen the 1 min negatives, basically from about 1827 to 1820 overnight lows before opening (ES) at 1828.50.

Index futures still look a bit slow to get moving, but I think they will move, whether the targets above are realistic or not is hard to say because this is a measured move estimate, the main difficulty with that in this case is the very narrow nature or duration of the bases, there's not much of a footprint, thus they still look very normal and not anything special or a change in tone, if they did I'd close trading shorts and either adjust toward long exposure of go cash, I haven't done that and I'm not contemplating that.

I do see what looks like more upside short term at least coming for treasuries across the curve, but most importantly in the 10/30 year space, less so in the 5 year. This is an interesting development because it seems there may be two different forces at work in the bond market, the side that fears rising rates and the F_E_D is disingenuous with the accommodative policy ..."promises" which are ambiguous at best and the other side looks like a rotation from stocks to bonds interestingly, so that's something I'll be keeping a close eye on as you may recall, I do have an interest in a longer term core long position in something like TLT. This would also reflect a flow toward safety and away from risk which has not been a natural correlation for some time even though it is a legacy correlation.

So we'll take it as it comes, see what the reactions are, as I said, Index futures look a little sluggish, but I think they will pull through for the move first spotted yesterday in 3C.

I'll have more shortly.

China did miss on Services PMI so the China trade is on deck, we just need the right entry.

More to follow...