Day By Day

Futures are not encouraging overnight, but are not down and out, either.  I was looking for a 61.8% retracement on the S&P cash (1419), and sometime around 3:30 am, the futures obliged (1418) but then sold off steadily since.  They have not yet broken below yesterday's lows yet, but very well could.

That would not be a problem in my mind.  I would much prefer to see the cash S&P a tad lower than yesterday to test the 1405 area.  There is a lot of volume that was transacted in that area, and I'd like to see how it acts there on a retest.

Below 1405 would get interesting.  1391.74 would be the next spot of interest to me, but the big one remains 1354.65.

I would not be surprised by any rebound today after a test of 1405.  The 1418-1420 area still looks like a great spot for a retest.  Still taking this day by day scalping puts and calls and staying nimble.

Three headlines caught my eye on Zero Hedge this morning:

Australian minister says resources boom is over (Reuters)

China dismisses reports of lost gold reserves (China Daily) - so China really did lose 80 tons of gold.

Qantas Cancels 787 Order After Posting Annual Net Loss (Bloomberg)

1 and 3 seem to confirm each other, while 2 is just hilarious.  I'm still watching AUDUSD, AUDJPY, and GBPAUD on a daily basis for tells.  Something is going on over there.

Both gold and silver are up against the resistance lines of their respective falling wedge patterns.  It will be incredibly interesting to see which way they break. Gold now represents 44% of John Paulson's $21 billion Advantage Plus fund which is down over 20% this year.  So he's basically All In.  He needs a rally or he'll be looking for a new line of work.