Thursday -- Less Compelling

S&P E-mini Futures:
Up another 1% after yesterday's turnaround.

News:
No sooner did China become the new Fed than China was stripped of its laurels.

In a speech yesterday, NY Fed president Dudley deemed rate hikes this year to be "less compelling." Suddenly the Fed was back in control for a day, and Dudley became the new Bullard.

But with chatter about China reducing its US treasury holdings in order to facilitate the yuan revaluation, the clouds may darken soon.

They sure are darkening here as Erika gets closer . . .

FX:
AUD and CAD continue their recent war dance higher. CHF too. EUR and JPY weaker.

Treasuries:
Perhaps the China chatter is why the yield curve is higher yet again, and why price charts still look vulnerable.

This could be the worst thing for the Fed at the worst possible time -- losing control and being compelled to raise rates.

Energy:
WTI crude still well bid. Still a bit suspect from a chart perspective though. Ditto and ditto for NG.

Metals:
Gold may have lost its developing impulse pattern. Silver rolled over to a new low. Less compelling.

S&P Outlook:
Yesterday was a great turnaround. Yet 1954.09 has still not been exceeded to the upside, and the 38% retracement has not been reached. That should change today at the open (futures have done it).

If it does, 2000, 2053, and 2081 would still be possible.

If it doesn't, new lows could materialize sooner rather than later.

Still wanting this market to get as high as possible while looking less and less compelling internally. Viewing the next buy of TVIX at $8.50 or better.