A.M. Observations

After looking at yesterday's data and the overnight futures which had a USD/JPY led rally that faded out, I suspect the path of highest probability is a condensed overnight model, which would be more like lateral chop for one reason.

We have this in most averages.

 To me, although it could make a sharp reversal as there's been distribution through the whole move, it's usually not a high probability, so we'd need something like this...

The IWM has a wider top area, but I think yet a bit wider and some choppy lateral trade will do it.

This is the 1 min ES chart that looks to start a move higher this morning intraday and this...

is what the 5 min charts look like, a lot worse than before and I think ultimately this is where we are going, ultimately meaning next, I'd think today.

The USD/JPY has a small intraday 1 min positive after sliding overnight after being up, I think that pattern will likely continue, maybe with more of a downside bias.

The 5 min USD/JPT has a large negative, that is the overriding bias.

So I think choppy lateral with a downward or rounded bias leading to a nasty move down below the 200-day moving average.

I'm positioned mostly short except for a couple larger term positions like MCP.