Monday -- China, Ackman, Yen, S&P

S&P E-mini Futures:
Down hard.

News:
Today's scary start is brought to you by China.

China's Seven-Minute Selling Frenzy That Shook Global Markets

"China’s CSI 300 Index had just tumbled 5 percent, triggering a 15-minute trading halt, and investors were scrambling to exit before getting locked in by a full-day suspension set to take effect at 7 percent. When the first halt was lifted, the market reaction was swift: it took just seven minutes for losses to reach the threshold for a second suspension as volumes surged to their highs of the day."

I tend to disregard global market tumbles caused by people flipping out in one market for one set of reasons. When it spreads to other markets, it tends to generate other reasons, becoming a kneejerk chain reaction at best.

Should volume come alive, and internals fall apart, then it gets my attention. Until then, see what the day brings.

Elsewhere, when no one was looking: someone tried to slip this one by on New Year's Eve after the close.

Ackman's fund sells 5 million Valeant shares to generate tax loss

FX:
The most concerning thing to the S&P 500 lately has to be the yen.

With its close correlation to the S&P, the yen calls into question the possible impulse pattern up and instead bolsters the ABC down scenario.

If correct, today could be confirmation of the "C" wave down.

Treasuries:
Bid across the curve, which in my opinion, is what should be occurring this morning if it's not the end of the world. Money is being put to work.

Energy:
WTI crude ripping. NG not.

Metals:
Gold and silver ripping. Copper not.

S&P Outlook:
The biggest red flag to me is Europe this morning. DAX down 4% currently. Everything else off well over 2%. So things could get a little more bloody here.

The S&P did not hold the breakout last week and did not support a backtest of the trendline, so today's pattern shouldn't surprise.

The contracting wedge seems to be gone and in its place seems to be a more parallel trend channel. Breaking 1993.26 is not doom & gloom, but holding it could be quiet bullish.