Gold continued its oversold rise yesterday while U. S. equities logged heavy losses. However, the precious metal is turning south again as the S&P futures find solid support in their key 800 psychological level. Therefore, the negative correlation between the two appears to be active once again.

However, the relation between the two has been scattered and unreliable as of late. On one hand, Gold could be suggesting that the equity rally is legitimate and will reactivate shortly. On the other hand, Gold could be participating in the deflationary pressures we witnessed during the height of the economic crisis. It is difficult to be certain right now.

The battle back to $50/bbl never materialized yesterday and crude futures continued to freefall from our 1st tie uptrend line. Though we don't want to be premature, it seems the backbone of the uptrend has been broken. Now, we could always see a strong rally today to get the futures back above our 1st tier uptrend line.

However, our point of no return uptrend line is looking down at price. This is a strong statement, and crude futures could be in for even more large losses before they stabilize. The futures are holding onto April lows for dear life, and if these don't hold, look out below.

The 30 Year T-Bond futures logged only modest gains despite yesterday's broad selloff in U. S. equities. The 30 Year futures are following our downtrend to a tee, indicating they are still gravitating towards the downside.

Therefore, the 30 Year futures could be transmitting the same message as gold in that the present selloff in U. S. equities is only temporary. On the other hand, the selloff in the 30 Year futures could be disconcerting in the fact that the movement represents disinterest in the massive treasury auctions taking place to fund America's economic initiatives.

The S&P futures continued their selloff yesterday as well-regarded economists, including Dallas Fed's Fisher, flooded the wires with negative outlooks concerning the health of the economy and solvency of banks. Although the present pullback has been brisk, it hasn't been supported by high volume or U. S. economic data. Regardless, the selloff has taken the wind out of the rally's sails.

The S&P futures went as far as to dip below our 1st tier trend line. However, investors will need very negative news on the earnings or data front to send the futures back below the critical 800 level.

The USD/JPY topped out yesterday and is reencountering the key 100 level as we anticipated. 100 is such a critical psychological hurdle that it's no surprise the currency pair is hesitating to leave it behind. The BOJ kept its benchmark rate at 0.1% today with little to no wiggle room monetarily.

However, the BOJ announced the initiation of new, vague quantitative easing tactics to try and liquefy the Yen. The announcement is having an inconsequential impact on the USD/JPY and its path is still highly reliant on the performance of the two economies.

The Cable followed U. S. equities and the Euro lower yesterday and investor uncertainty returned concerning the state of financials. However, the downward movements of the GBP/USD remain less exaggerated than the EUR/USD due to the consistent improvement in British economic data.

Today's manufacturing and industrial production numbers reiterated this trend, as both came in encouragingly above analyst expectations. Once again the relative strength of the Pound is revealed in the weakness of the EUR/GBP.