As interesting as the overnight drift lower and the Payrolls knee jerk higher may be to watch, I still think the market got some sort of news yesterday just because of the way that it turned so ugly so fast in underlying trade.
You may recall earlier in the week before our bounce had made any move, that the 5 min Index futures chart went positive and I had mentioned I wouldn't even consider a trade in either direction without the 5 min Index futures chart having a divergence in the same direction; that's my minimum standard for a trade.
Therefore, I'm less interested in knee jerk reactions to deflation in China or US payrolls coming in strong (headline) and more interested in whatever is causing a market that should by all means have no trouble bouncing for another few days with no problems, to take a sudden and dramatic turn to the ugly.
Since the overnight session, this is what the important 5 min Index Futures' charts look like now (these are not the same market average 5 min charts I said yesterday need to go negative as they just opened with the cash market)...
I suspect an options expiration (weekly) pin will be in place today until 2 p.m. and we stay pretty much range bound until then, but I think we will continue to see the signs of deterioration during that time which may lead to an ugly close to the week the last 2 hours, we'll see as we move forward what the charts are showing. Something did change yesterday, something that seems to have spooked the market out of a simple oversold bounce.
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