General Update

There's quite a bit that has transpired over the last several days, more specifically last night/early this morning and continues.

The commodity complex has been hit hard...

 Commodities vs the SPX- 60 min.

This time the overnight rout wasn't in crude as per usual, in fact as I said yesterday, I think crude is as good a place as any right now for a bounce...

 USO 5 min positive. The caveat of course being, this is no trend change, but could be a very sharp move to the upside on a massive short squeeze.

Natural Gas is also up...

I've been watching UNG carefully and recently added to the UGAZ long. So long as UNG stayed in the band in white, I was okay with it as stronger divergences were taking over and this morning it has gapped up (15 min leading positive).

It was Dr. Copper who was pummeled in the overnight session on a collapse in Chinese demand which accelerated a bout of margin calls and stop-loss selling.

 Copper vs SPX 2 min chart with copper's fall on opening trade in yellow.

Copper is now at 5.5 year lows (red) vs the SPX.

The larger message here is Global growth concerns which brings us to another overnight event, the World Bank downgraded Global Growth for 2015 from 3.4% to 3%, the US being one of the few countries not downgraded. Copper is called "Dr. Copper" because of its forecasting features for global growth, the action in copper has not been supportive of growth or the market.

As already mentioned, we saw crazy 900 point round trip volatility in the Dow yesterday, nearly -600 points off yesterday's highs to this morning's lows.  The larger story here is volatility picking up which is not bullish where we are with the charts we have. However it's not a one way street, it just doesn't tend to end well for the market. Watch for increasingly more unpredictable market moves, especially to the downside and on gaps as volatility increases.

Overnight the main event scheduled was the top European court, The European Court of Justice (ECJ), expected ruling on whether the ECB's OMT program was legal as the Germans charged it was not, which has more to do with ECB QE and whether it would be legal than anything. The court ruled that OMT is legal under conditions, so there's a legality and a conditionality, this sent the EUR/USD lower pretty sharply after the 4 a.m. announcement...

EUR/USD spikes lower on ECJ ruling, setting the path for QE. Shortly after that Draghi announced that the ECB is ready to buy government bonds, however the anticipated sell-off in the EUR/USD didn't amount to much of a reaction , a mere -15 pip move in the pair, it seems ECB QE is fully priced in.

This hasn't done much for European markets either with the FTSE 100 down over 2%, the Dax -.75, the CAC-40 -.73%.

Kocherlakota, a non-voting F_E_D dove also was out again telling Reuters he does not favor a US Interest rate hike in 2015.

Then this morning at 8:30 US Retail Sales missed big, down .9% month on month vs a -.1% expectations. 

All of this bad news, would normally be taken as good news. The World Bank growth downgrade, the badly missed retail sales, all point to the F_E_D's inflation target of 2% not being hit, in fact just the opposite, which would presumably stay the F_O_M_C's hand longer before raising rates as they want to be reasonably sure inflation will move to 2% before hiking rates, so all of this bad news would almost always be taken as good news and it may still be, which is why until those 5 min charts are destroyed, I'm careful not to call anything or load up the truck on new trades, but rather stay patient as I see the current position of holding current shorts an almost no lose proposition, they either keep working as they have been or we get a bounce to short in to as charts beyond 5 minutes are destroyed.

These charts are form earlier this morning, but still they show some interesting things, although I don't usually look at them this early in the day.

 The pro sentiment indicators which have been a few I've been waiting to see decline as confirmation of the 5 min charts going south made a sharp move lower this morning and recovered quite a bit, but it was the first really sharp downside move since the bounce/accumulation was put together around the 6th of this month.

HY Credit is also looking troublesome, HYG is not looking good this morning and this is one of the first go-to levers for ramping the market.

HYG gaps down, 3C negative as well (1 min intraday).

 The 5 year yields have seen price this morning roughly revert to their short term mean, however the 30 year yield continues to lead lower...

30 year with today's drop lower in red (5 min chart).

I have a lot of charts to look at, but I'm still looking for those 5 min charts to fall apart.