Thursday -- More Overnight Bedlam, What Now?

S&P E-mini Futures:
Down hard, but firming.

News:
Remember those four rate hikes the Fed announced for 2016?

Any day now they'll be walked back one by one until they eventually walk back the rate hike itself -- yes, that massive 25 bip one.

Any day now, Christine Lagarde will have to appear in head-to-toe Chanel to publicly save face for including the Chinese yuan in the IMF's SDR basket.

Any day now, Bernie Sanders will call for a China bailout.

That's the news from Mars, anyway. We'll see what happens.

Notice how China chose to aggressively devalue once it got the green light for the SDR.

When will world leaders realize that China is simply not ready to play in the sandbox with the rest of the kids.

And hopefully the rest will finally re-learn that central planning doesn't work.

FX:
USDJPY smashed through 118.055. On a monthly basis it may be forming a large triangle. Global equities better hope so.

CHF getting safe haven flows.

AUD & CAD getting smashed even with a weaker USD. Now that's something.

Treasuries:
Finally bids have happened over the past few days and have reversed the trend toward inversion. That may signal a reversal in rates next.

If so, the Fed will be exactly where it should be: caught in the spotlight. They could be forced to ease just to maintain an illusion of credibility.

Energy:
WTI crude fresh lows overnight. NG higher.

Metals:
Gold caught a bid. Silver, not so much. Copper getting hammered (which is cautionary).

S&P Outlook:
The 1:1 Fib extension at the 1935 area could come into full view this morning, though there are higher levels around 1945 and 1955.

I've also seen some nice Gartley charts targeting the 1920 area which could line up with a deep 78.6% retrace from the November highs (1924ish).

What could be problematic is that yesterday was showing signs of reversal, and the wave subdivisions were confirming. Today's move could require patience. Hard to tell at the moment without market internals.

However, if the USDJPY is forming a large triangle, it could hint the same for the S&P. Therefore I still am on-guard for a reversal. Lower prices, with the cushion of UVXY and TVIX, will take care of themselves.