A.M. Update

Good morning,

Tone of market action is definitely on the Risk Off side this morning with the German Dax down over -2.5% after the weekend scrap with Greece in which Greece has made their position perfectly clear, they will not back down or compromise, they will not seek more bailout money or an extension to the current agreement, they even went so far as saying the ECB  has failed with monetary policy and the Troika structure must end, which is a little off topic, but nonetheless bold.

There's talk of this hitting the EUR/USD particularly hard as a Greek Exit is more and more on Europeans' minds as they continue to pivot toward Russia which always seemed the natural course in this stand-off, especially once they lost the upper psychological hand with the EU after some initial dilly-dalying in talks.

In addition the Ukraine peace talks are going nowhere fast and are exposing fractures among the US and European allies in the process.

Chinese Exports were reported in near collapse with Imports weaker than expected which is not surprising as the Baltic Dry Index hits new record lows below the 1986 low of 554, which is the price to ship a ton of dry goods whether metal or grain, so the Chinese import/export print is not surprising in that sense.

It was a bit hard to tell what the early week ahead would look like, I suspected some early technical strength followed by weakness, futures seemed to suggest that last night, although not screaming it and I see the same thing this morning.

 As we saw in NQ last night and as suspected late Friday afternoon, it looks like some early technical strength, again, although not screaming and as seen last week and last night...

The bigger picture (TF 7 min) has eroded and there's a clear divergence from last week.

In addition as suspected, the 30 year Treasury is rallying off Friday's lows as the charts shopowed which fits with the chart above.

And the currency to watch as it has been in decline since the European open is the EUR/USD where some are calling for lower levels than parity, actually back to the lows of $.90 on a Greek exit.

We'll check opening indications, but the overall theme looks much more like weakness with any upside (early) simply technical.