Tuesday -- It's Not Zika. It's The Yen

S&P E-mini Futures:
Down hard after overnight double top, yet still in a range.

News:
Bleak.

Bonds have been rallying since 1981 and people still think it means stress.

Get this. We are in a global credit economy: when bonds go down it means stress.

You know who's stressed? The BOJ's Kuroda. The Nikkei tanked over 5% last night, 10-year JGBs went negative for the first time ever, and the yen is soaring.

It was the best of times

It was the worst of times

Oh, and it may be old news, but it might become very important soon:

Fed May Lack Legal Authority for Negative Rates: 2010 Memo

Meanwhile, Europe is currently getting hammered, and its banks are unhappy.

FX:
There's a reason why FX is the first thing I look at each day after the headlines. And there's a reason why the first one I look at is the yen.

First, FX dwarfs all other markets.

Second, the yen is still the most important carry currency beside the USD.

The yen is down over 6% in a week -- a staggering move in FX at any time -- and a damning assessment of Kuroda's negative interest rate policy.

Another pummeling is AUD today. CHF is soaring. Risk Off.

Suddenly it's not China. It's not oil. It's not Deutsche's CoCo bonds. It's not Zika. The problem is central banking and its abject failure, especially in the face of deflating credit.

Treasuries:
Thus far the momentum continues. Soon these will need a breather.

Energy:
WTI crude has not yet achieved escape velocity. Below 29.25 would not be good.

NG consolidating its latest moonshot.

Metals:
Gold took out 1191.70, broke its succession of lower lows and lower highs, and opened the door to a much larger bounce. 1450 is possible.

Silver still has a way to go. 15.95 needed to confirm gold. Copper down 3%.

S&P Outlook:
Liked the close above 1850, yet that level was soundly broken during yesterday's trading.

Cited the 1828-1832 level on Stocktwits intraday and there was an epic reversal from there. Need follow through today to keep the count on track.

Note that "B" waves are notoriously fickle. Frost and Prechter described them as phonies in the Elliott Wave Principle. Therefore the subwaves could surprise both up and down.