Hello Everyone,

Here's a link to Tonight's Newsletter.

Finally a 'shot across the bow' today with a very sharp decline in the US Market and S&P 500 in the morning, then bottomed at 11 am before recovering most of the intra day declines. Remember, yesterday the S&P 500 finally tagged that BIG ROUND NUMBER of 7000 that I have been touting as a target/magnet for a long time.  Despite the recovery the market still seems vulnerable, and below are some of the items I've been pointing out.

Some concerns and things to watch:

- The VIX is now uncorrelated to the S&P 500, and sometimes you can get market inflection points when this happens so take note.

- Also, I'm seeing a negative divergence via HYG high yield corporate bonds vs SPX from my 60 min chart.

- Concerning action in the Japanese Yen and Bond Market

Tomorrow: PPI/Core PPI, Chicago PMI

Matt