China, Brazil, Australia, And Whatever The Market Wants

Futures look as though they're shooting for a double top in the pre-market at 1407.75.  I'll be watching that level today, no matter what happens.  It looks like a rising wedge over the last two sessions.

All this nowhere action is frustrating bulls and bears and will be fodder for the next move, up or down.  It could be big.

The big headline on Marketwatch this morning was FUTURES PIN HOPES ON CHINA. Hilarious.  Right on the heels of comments from Brazil-based Vale SA, the country's largest iron-ore producer, that China’s “golden years” are gone.  And right on the heels of Brazil's announcement of a $60 billion stimulus.

Brazil is China's largest export partner, primarily iron ore . . . for all those empty cities being built.  So maybe the executives at Vale know something that we should pay attention to.

This was already the subject of Brazil: The World's Largest Canary.  So it's no wonder that Brazil eventually announced their $60 billion stimulus.  China is slowing just as the rest of the world pins its hopes on it merrily buying everything under sun while its biggest export partner suddenly feels the need to pump money.  Amusing irony.

Another item I'm noticing is that GBPAUD is rising again.  This forex pair gave advance warning of the April and May highs on the S&P, and it went vertical during the Lehman disaster.  In general, rising GBPAUD signals risk OFF, while falling signals risk ON.

AUDJPY is looking shaky but hasn't broken yet, much like the S&P.  AUDUSD is definitely having second thoughts about moving higher as well.  But both are hanging in there.

HYG and JNK are also flashing caution by not confirming the exuberance of SPY.

Still, none of this matters until the market does what it's gonna do when it's gonna do it. I still like 1415.32.  I still like below 1400.  But it's all about what the market likes.