A.M. Update

Futures fell overnight just as many indications had suggested...

Internals, Leading Indicators, 3C charts, the -50 point CONTEXT differential, the fact the market even needed to rely on the SPY Arbitrage scheme yesterday to get a bounce, all suggested the market come down today, but probably the first indication that they would be down today was on Monday...

That would be the identification of the reversal process in which the market would be moving in a more lateral/rounding top-like price pattern with tighter chop.

Also, thus far Crude futures are down overnight as well.

Crude futures overnight. Just as the monthly EIA report suggested, the Saudi's overnight have taken the recent spate of strength in oil prices as a sign or excuse rather to increase supply to a new record high with March production up another 659,000 barrels per day to 10.29 mn barrels a day.

Additionally the Iraqi Oil Minister said their output should reach 3.1mn barrels a day as southern oil fields are strong as weather conditions improve.

Gold futures also stayed strong overnight...

However a new put position may be about to open up. After opening a gold put Friday and closing it Tuesday morning for a +30% gain on expectations of a near term bounce in gold as we have seen the last two days, there appear to be negative divergences starting to build in gold futures again, although we'll look more closely. Remember closing the May put was only viewed as short term.


In addition to that, the Greek drama is getting worse as they "informally" asked the IMF if they could rearrange their payment schedule as there's not enough money to pay the IMF, government wages and pensioners, the IMF refused sending Greek bonds tumbling lower.

Overnight Asia closed up with the NNikkei lagging at a mere +0.08% gain on the back of a strong Yen as our analysis has called for, while the Hang Seng was mediocre at +0.45% and the Shanghai Comp. led at a respectable +2.71%, which may open a trade opportunity in FXI.

Europe looks much weaker, whether it has to do with the IMF request and denial by Greece or not, I can't be sure, it appears the timing is similar.

More soon