Ignition...liftoff! USD/JPY rose from 101.43 at the low to 101.75 at 8:00 am. At 8:00 am SPX futures started to ramp. SPX pre-market is up 7 points and may go to Short-term resistance at 1876.00 or 17-day resistance at 1878.00 (not shown).

There is some concern that the decline so far is not impulsive. The best explanation why is that the shallow clustering of supports temporarily prevent the declines from making the longer declines typical in an impulse. Another explanation is that SPX may be making a Leading Diagonal wave. Something else may be happening if the ramp goes above 1885.51.

On the Calendar today, is a speech by Janet Yellen to the Joint Economic Committee of Congress at 10:00 am. ZeroHedge reports, “If there is anything that does matter it will be that the central-planning Chairmanwoman of the "free" world, Janet Yellen will speak before the Joint Economic Committee of Congress at 10am. Algos are surely hoping that she reveals a USDJPY target, and thus S&P 500, EOD target at least 1% above the overnight lows.”

Some attribute the ramp to renewed talks with Putin, but that may be just an accident of timing. Hopefully the ramp will be over soon after 10:00.

In the meantime, yields are beginning to rise from their low. Perhaps the Yellen speech may spark some concern about the low rates vis-à-vis the risks that the market faces today.

Bank of America may be finally right on their “short bonds” call.

Non-Farm productivity fell most in a year at 1.7% in Q1 - notably worse than the 1.2% drop that was expected. Output growth slowed dramatically and real compensation also fell.

Regards,

Tony

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