A.M. Update

It's a busy day in the market today with the heaviest earnings day since the season began. In addition, Yellen will be before Congress in the bi-annual (formerly Humphrey Hawkins) testimony. Her prepared comments are already out which are no shocker, a 2015 rate hike is appropriate as long as the economy behaves as expected which has been a litany of excuses that border on , "well it snowed in June, that's why the eco-data wasn't up to par, but that's transitionary and an unusual event". As I've held for sometime, the F_E_D is not hiking for the normal reasons the F_E_D would hike, to slow an overheating economy. The F_E_D is very worried about something they haven't voiced, so much so that the damage a rate hike will do to the economy at this stage is negligible vs. whatever they are truly worried about.

The other main event of the day of course is the vote in the Greek Parliament that will start deliberations around I believe at 10 am local, take a break at 6 pm local and pick back up at 10 pm local with a vote expected by midnight, but everyone seems to expect this to go well in to the early morning hours as Tsipras' Syriza party members have defected en masse leaving Tsipras to seek out backing from other parties to pass the ESM $85 billion loan package which the IMF has made clear is utterly unsustainable and will cause Greece's banking sector to fail. It seems the EU? had this IMF report over the weekend even though we just heard about it so it would not surprise me if that were part of the reason underlying trade on Monday looked so bad, smart money likely knew that the IMF could potentially blow up this can kicking deal that even the European Commission came out this morning echoing the IMF's comments saying that the deal won't work without significant debt relief and offered a broad number of suggestions that all fell short of the IMF's upfront debt haircut.

As I predicted last week, the US who has veto power in the Washington based IMF is clearly involved (predicted 2-days before Obama formerly got involved), which I believe is much about the Greek pivot toward Russia and China with the former likely being very happy to put their foot in Europe after more than 20 years of NATO putting their feet in former Soviet countries.

As for the 3C Futures charts, the Index futures look a bit more in line with the natural progression of distribution through a bounce, but obviously there are several wold cards on the table and today's underlying trade should be very telling.

Here are some example charts.

 NQ 1 min Index futures are the best example of Index futures being "managed" again overnight, likely because of Yellen's testimony, the F_E_D doesn't want her taking any more hardball questions about a rate hike than need be and if the market were crashing right now during her testimony, it would leave the door open for some ADDITIONAL hardball questions.

THE ES 3 MIN CHART IS CLEARLY DIVERGING NEGATIVELY AND THIS IS MIGRATING VERY CLEARLY THROUGH LONGER TIMEFRAMES.

The important 5 min chart which must be in line with any trades I take is negative as seen above on the Russell 2000 futures, this would largely preclude any new long positions in the market and only short if they are heavily correlated to the market as most stocks are. This is also a major breaking point and once it turns, it's usually not long before the market turns.

ES 7 min chart has gone from base to confirmation to leading negative divergence so the 5 min chart is migrating to longer timeframes.

 The 10 min chart which was the strongest leading positive chart last week has turned negative

And now the 15 min chart is showing a clear leading negative divergence.

The good news is that we seem to be sticking more to a process and it may last the week as initially forecast giving us time to arrange new positions, the bad news...well we'll see how bad it is during the cash market that just opened.