A.M. Update

Good morning.

Other than a slew of government organizations in China creating a buying panic in the last hour of trade, the old "Bang the close " you may remember, sending the SHCOMP up 3.44%, trade has been relatively muted overnight with Europe currently mixed and mediocre.

As for US futures, they look just about the same as they tend to before any F_O_M_C event...

 ES overnight since yesterday's cash close, rather muted with a brief bout of risk on that has been retraced pre-market.

I still don't see any catalyst like the USD/JPY which we saw divergent before the Monday early morning ramp on the carry pair's strength. So As I said yesterday, the catalyst would likely have to be F_E_D related or hitting HYG harder to the upside.

As for the longer Index futures, they are starting to get a little uglier as we expected.

 The charts that were in line like this 5 min ES chart is starting to go negative, these are the kinds of divergences I look for to start new positions although it's pretty minor at the moment.

The  same goes for the 10 min chart, but again it's still relatively minor. If this divergence grows , then I'd say we are getting ready to make a run below the SPX's 200 dma.

The only issue right now is the market still has some gas in the tank from yesterday. This is the SPY 5 min chart, but some 10 min charts also still look good for the near term and I expect they'll stay up until those charts no longer look good. It only took an hour or two for those charts to really shape up yesterday, so I suppose it could go the other way just as fast.

The bottom line is we'll have to watch the chart development, manage some positions and maybe consider some new ones.

Don't forget it the F_O_M_C at 2 p.m. and as always, beware of the initial knee jerk reaction. I don't want to speculate as to what may happen at 2 p.m., but we'll be watching for the leak as we have found them in the past, just not very often.