Early Update

As expected, early weakness is taking hold, the falling USD/JPY seems to be the main driver this morning, but there were some other apparent events as well and all is FAR from what it seems as I suspect we will continue to see at least up until Wednesday's F_O_M_C.

 First USD/JPY early overnight strength gave out.

As the cash market opened the correlation between USD/JPY and ES/SPX futures became even tighter with USD/JPY dragging down futures/the averages as we expected this morning-WEAKNESS.

However this is abundantly clear as well in TICK, almost more so than in USD/JPY as if this move were intentional as TICK opens at +500 and quickly moved to -1300 this morning.

The 3C concept of price picking up where a 3C divergence left off, even over a long weekend, still holds. This morning's pre-market strength rapidly faded to weakness once the cash market opened as usual, this is a strong concept showing the advance planning of market participants who have the power to move the market.

SPY 1 min negative this morning picking up where it left off late Friday,

The same for the 1 min Q's and

The 1 min IWM

However...  There are still areas of strength in the SPY and especially the IWM, although not so much the QQQ right now, which would be along the lines of the only head fake move really needed would be above the IWM's 6 trading week range.

 IWM 5 min still positive.

SPY positive only goes out to 2 min, relative weakness.

It appears QQQ's positive is fading, which it may be, but we can't say that yet with certainty as this 3 min looks pretty negative this morning...

As does the 5 min.As does this 5 min surprisingly, however there are some additional interesting signals that all is not what it seems.

 HYG intraday weakness picked up where it left off on Friday, but this is one of the keys to moving the market and...

 it's 3 min positive still holds, this will be a key asset.

Also TLT or 30 year bonds...

 Again, weakness picks up where it left off Friday in 3C, this needs to head lower to give the market support.

However as I have been thinking, any such head fake move would be short lived, enticing a Santa Claus rally expectation and potentially slamming the door on it once the bulls start to move through it.

The TLT 5 min chart remains in line with its trend strength.  See above.

As mentioned the VIX star from Friday has already seen weakness this morning which you wouldn't expect on this morning's action, I don't think the VIX upside run is done, but it's not unusual for there to be some small corrective moves in such a large run.

One of the more interesting signals this morning is my custom SPY/RUT Ratio and VIX Term Structure indicators, both giving bullish signals, at least near term for the moment.

 The SPX/RUT Ratio (red) is positive vs the SPX trend above, not confirming the downside. And the VIX Term Structure is above 1 at the white bars, an early buy signal, however it needs to be put in to context on this 60 min chart.

The current signal is not as strong as the one ar #1 from July and you can see that caused a small move to the upside, just what I am looking for. In August and October the signals were much bigger and resulted in much bigger moves so this looks , so far, like what I'd expect, although I was a bit surprised to see it, it is not on par with the August/October lows and serves as early warning as a buy signal.

I won't be changing any positions and remaining short looking for the chance to short more in to price strength, at least as of the moment.

All is certainly NOT what it seems