A.M. Update

Good morning, I hope you had a pleasant weekend.

Well there's a lot of news out of Europe with regard to Bannk Espirito Santo and a capital raise, a top level management shake-up and news that Portugal will NOT be bailing out the bank which is "said" to have lifted risk sentiment, but this was already apparent to us last week starting with initial suspicions with accumulation on Tuesday and as sloppy as it was, through Friday leading me to believe in Friday's , THE WEEK AHEAD...

"I find usually whatever our initial suspicion is, it's usually the correct one, too much second guessing tends to cause you to miss the obvious pattern right in front of you.

Our initial scenario that started Tuesday of this week was the market was putting together a base to bounce as Right Shoulders of H&S tops have already started breaking which is a timing signal telling us we are very close to the end of the F_E_D spiked punch-bowl....

Looking at leveraged ETF which give signals earlier than the averages many times because of the leverage shows me a high probability we bounce next week, however I don't know if I'd piggy back the bounce, but I would sell short in to it and sell longs."

If you didn't see the charts that lead me to believe we bounce and also that it's only a bounce and therefore useful for tactical positioning, you can check out the post linked above, The Week Ahead.

I also saw evidence in TLT, VXX and HYG.

Another expected pullback was in gold and GDX, 

 15 min Gold futures with a negative divegrence and this morning,  gold has pulled back hard with the biggest drop in 2 months and at 1 month lows.

GDX is also set to gap down, almost to the support area I suspected it would break under for a pullback we can eventually buy as a great long entry at low risk.

 Gold futures 1 min chart with a head fake.

Here's the SPX futures base from last week, almost exactly as drawn/expected on Tuesday of last week with a break below support running stops and a "W" like shape.

The 5 min chart has some weakness on it so I'm going to be watching this carefully before making any short term trading decisions.

The USD/JPY is the initial instigator of Index futures strength, but on this 1 min intraday chart it already has a negative divegrence forming so we'll see if this holds and what turns up and how we can use that.

We'll know more in a hour or so as to how we might want to play this, but it obviously has nothing to do with Bank Espirito Santo in Portugal.