Early Update

So far in the early going, there's not much on the positive side as the A.M.. UPDATE showed in Index futures.

The $USD jump on Initial Claims has so far failed to send USD/JPY much higher and the market has been fairly well correlated to that carry cross.

 USD/JPY with a boost off Initial Claims but not much since then.

 Add ES in purple that has been coming down from some overnight strength in a early A.M. trend and you can see there hasn't been much of a kick start so far.

 However the $USDX still has a positive intraday divergence so it should give the market a little kick in the pants.

 HYG has also not done much to lift the market although it does have a support area here, as small as it is, it would be enough to get a bounce off the ground, the thing is at this moment it looks like some of the positive activity from yesterday which was very small is wearing off, which is something I'll need to watch to see if it gets worse as in there's some sort of panic.

 Looking at the Intraday NYSE TICK, it fits pretty much perfectly with the early morning action, it's in a very "Blah" range of about -500 to + 500 which is very mellow and what I'd expect to see in a market that's not moving and or diverging between the averages as we are seeing right now between the Q's/IWM and SPY/DIA.

 This is the SPY's intraday chart with a small double bottom and a positive divergence so it looks as if it's still set for a move higher.

 However as a reminder of what the bigger picture looks like, this is the SPY 5 min chart leading negative in a big way with only a relative positive within that leading negative divergence. The way I'd interpret that is the dominant underlying trend is strong negative and the short term underlying trend is positive / weak.

 As for the intraday IWM, it has seen some upside, but just like Index futures, it's seeing no confirmation, rather strong signs of selling in to any price strength.

The Q's are essentially showing the same thing, by this time in the morning the 1 min intraday chart could have easily confirmed the Q's gap up, although as you can see, it hasn't even made the attempt.

This is exactly in line with what we saw in futures pre-market, any kind of price strength has seen distribution in to it, but there's still enough support mechanisms in place that a bounce in the other averages or market as a whole is still likely, but as I said yesterday, not what I'd call a low risk trade.

Right now I'm most interested in whether initial signs of weakness in assets like HYG continue or if they support the market for this bounce. A turn to the downside could get ugly quickly and that's why I have been pretty adamant about highlighting the difference between a probability and a high probability /low risk trade. Sometimes patience is just what is called for.