Pre-Market Futures

Pre-Market Index futures are taking a pretty good beating, as early yesterday it could be blamed on the Ukraine conflict, but as we saw after the open, the market wasn't thinking about Ukraine. It could be blamed on stronger than expected Service PMI's out of Spain, Italy and France with Spain's coming in at a 7 year high, perhaps a new excuse to stay Draghi's hand from any additional easing and perhaps that's to blame as the EUR/USD takes off like a rocket and the USD/JPY fall like a rock.

 USD/JPY with a slight relative positive divegrence, we'll see if it gets run over, but there are negative divergences in both Euro and Yen single currency futures and a positive divegrence in the $USDX, so perhaps this positive divergence just starting will get some legs.

As you can see ES (purple) is now tracking the USD/JPY, apparently the algos caught on and are following the pair, ...however...

 As bad as ES looks on this 1 min chart with the "start" of a positive divegrence, it's not well formed at all yet, we could think of a lot of things to blame, how about Barclay's dismal trading revenues reported in earnings today? Down 41% for Q1!!

From the Wall Street Journal:

"

Revenue fell 41% in Barclays's fixed income, currencies and commodities division, typically its biggest earner, in the first quarter, halving the investment bank's operating profit. It was an even bigger fall than analysts had expected and compared with roughly 20% declines at rivals which have also seen clients pull back from bond trading because of persistently low and stable interest rates.

Barclays executives are now trying to get the business in shape to cope with the slowdown and new banking rules, as part of a broader restructuring to shed thousands of jobs and improve returns across the bank. Chief Executive Antony Jenkins said his new strategy Thursday "will address issues underlying the performance challenges we have recently experienced, including positioning the investment bank for the new operating and regulatory environment."

The lender's CEO is launching a new strategy for its investment bank as a string of its top executives and deal makers are departing, raising fears that clients could take their business elsewhere if the exodus continues. Mr. Jenkins has also been under attack from investors for raising bonuses at the investment bank last year despite a fall in revenue and profit, adding to pressure for him to clarify his plans for the unit."

I have mentioned recently the F_E_D's fixed rate Reverse Repo (1-sday) on April 30th over 200 bn , the second highest ever, all so banks could fill capital shortfalls to fool investors and regulators, TRULY to Window Dress and make themselves look stronger than they are, if even for a day, but that day was the end of the month reporting period.

However, the truth is, that deterioration we saw late yesterday and in to futures last night...Market Starting to Reveal More About Intraday Trade and Futures Update can be seen below through the late afternoon regular hours and the entire overnight session...


5 min ES

So perhaps it's just the fact we are at end stage Stage 3 in at least 2 different cycles, 1 major (February Cycle for all averages except NDX which already retraced it) and the other minor (the April 15th cycle).

The two cycles in play, both in late stage 3...we shall see.