Wednesday -- Global Tapering In The World Of Passive Investing

S&P E-mini Futures:
Slightly higher in continued chop.

News:
The tone from central banks has been shifting and it may be time to get serious.

Sumitomo Mitsui Banking Corporation just stated that the "BoJ governor’s new stimulus plan ‘is essentially tapering.’" Not good.

Reuters -- ECB 'taper' talk hits stocks. (Bonds too. Higher yields in Spain, Italy, and Germany this morning)

The Fed's Lacker is speaking again today. Recall he wants the Fed to surprise the markets . . . with a hike.

Meanwhile, ADP Employment was just reported near 3-year lows.

Amid the $43 Fog Point martini and the "new movement of shockingly priced martinis around San Francisco," it seems the town has a budding homelessness problem.

'Disturbing' photos highlight drug, homelessness issues in San Francisco's SoMa

Now that the markets have gone up up up for nearly eight years, Blackrock wants to cut prices on ETFs "anticipating a greater shift to passive investing."  Blackrock's iShares lineup will feature lower expense ratios on 15 stock and bond funds aimed at buy-and-hold investors. (I'm personally looking forward to a high-volatility trader's market for the next several years)

How did Blackrock get so comfortable as to slash fees? The same way everyone else has. With record valuation levels.

The chart below was one of those "I wish I thought of that" moments.

John Hussman at Hussman Funds knows P/E ratios are useless in the land of buybacks.

But P/R ratios aren't -- that would be price-to-revenue. How simple.

And how exorbitantly overpriced, far beyond 2000 and 2007.

One last point: it looks like it's wedging to a top, with a very small Elliott 4th wave finishing now and an even smaller 5th wave to follow soon which should cap off a larger 5th wave from the 2009 lows.

In other words, fireworks may soon begin.

Source: Hussman Funds

FX:
CHF stronger, USD maybe getting ready to rest. AUD & CAD stronger.

Treasuries:
Volume again increased on a decline yesterday.

Energy:
Last night's API reported that WTI crude inventories dropped by 7.6 million barrels last week. Today is the EIA inventory report at 10:30am. Crude is currently ripping. NG isn't.

Metals:
Trying to bounce after yesterday's slam.

S&P Outlook:
Yesterday broke a minor swing point with higher volume. Market doesn't appear to have noticed.

Broken record alert: "The 2177 area and the 2181.30 gap continue to be valid targets, as does the 2094.55-2103.25 zone."

Might look like this: