Turn Around Tuesday -- Questioning Strong Dollar Narrative, Eyeing JGBs

ES Futures:
Straight down. New lows. But this should be the test of the lower levels previously anticipated.

News:
Everywhere I look this morning says the sell off in futures is being blamed on the strength in the dollar. It feels like a forced (planted) narrative. When media outlets run virtually identical stories across the spectrum, it's more like talking points rather than news.

CNBC asked this morning: "Are they gonna tolerate the strength in the dollar vs. other currencies?"

That's where this could be going: Fed currency intervention. However, they would more than likely fail miserably because the strength in the dollar is indicative of the early stages of debt liquidation. To counter that, the Fed would have to change the psychology behind it. Based on their performance thus far, that's rather far fetched at this point.

Here's what could be the stealth "reason" -- the latest JGB auction saw the lowest bid-to-cover since December 2013. The world is not prepared for trouble in Japan's bond market. Note also that the Nikkei had a rough night.

Also, Greece is an absolute mess. I expect the words "humanitarian crisis" to begin the rallying cry for some sort of global bailout (this means USA).

FX:
Likewise, the yen got whacked to a new low vs. USD, but is coming off slightly. Euro new lows. Aussie new lows. USD vs. Scandies, new highs.

Watch the yen. Strengthening (a decline in USDJPY, a la 2007) would be a huge message that something is very wrong in Japan.

Treasuries:
5s got within 10 ticks of busting through the Dec lows, but now rallying along with 10s.

Energy:
NG looking better than crude, but neither impressive still

Metals:
Gold may try to stage a small rally from current levels. Will be watching it closely.

S&P Outlook:
Yesterday's weak bounce on low volume was the set up for today's weakness, yet it is today's close that will likely be the bigger tell.

2041.88 is still key for the current scenario which calls for a rally continuation. Trimmed UVXY in pre-market. If correct, today could see a reversal to the upside.