Thursday -- Bunds & The Corollary, Nikkei, DAX, S&P

ES Futures:
Pressuring Tuesday's lows, a break of which could accelerate selling.

News:
German bunds have sold off sharply two days in a row -- as in credit is suddenly tightening. The spin is already happening. "Rising rates for the right reasons" could be next.

The problem with such a narrative is that one would have to accept the corollary which is that rates were negative for right reasons.

But with central banks in charge the world over, one knows that is not true.

Japan's NIKKEI got whacked nearly 3% last night. But the bigger news is that it broke a swing point (April 17th). Not good.

The good news, however, is that the DAX looks like it's making a large fourth wave consolidation, which could telegraph that the S&P wedge scenario is correct.

YELP is filling a gap in the pre-market. The latest example of a public company in search of a business model.

FX:
The bund rout is putting a bid under the EUR, as one would expect. I still see the EUR move as a bounce.

Treasuries:
The European bond rout has not gone unnoticed by treasuries, which have chosen to sell off as well. So far the only hold out above the April 13th swing point are 2s. But it appears to only be a matter of time until they join the price break as well.

Energy:
WTI crude is now holding above the 23.6% level. Not yet seeing the volume or open interest to take it to the next Fib level which is the 67 area.

NG would look more convincing above 2.69.

Metals:
Gold punched back below 1200 in a strong way. This is another indication that rates may be about to surprise the markets.

S&P Outlook:
Based on the action in the DAX, a case can be made that if there is a peak soon, it might only be a larger 3rd wave peak with a nasty 4th wave correction and 5th wave higher to follow.

Still thinking the level to watch for this scenario is 1737.92. If it holds, it's probably a 4th wave. If it breaks, odds could increase that this scenario is incorrect and that the market had peaked.

R.I.P.
Jack Ely, lead singer of The Kingsmen who immortalized the iconic r&b song "Louie Louie" with just one take, has died.

"Louie Louie" was an anthem of much of my misspent youth, starting with the day our first-ever babysitter, Craig Ballargeron, the oldest and coolest guy in the neighborhood, played the song for me on our RCA record player and promptly invited over two chicks to drink wine in our living room. Life was never the same.