The weak rally in the 30 Year futures peaked yesterday as anticipated. The futures are making a clear commitment to the downtrend, and will need a sharp reversal in equities to change this development.

The 30 Year futures are dropping below 3/24 lows as we type, and a retracement beneath our downtrend line seems imminent. The question becomes whether April lows can hold. If not, then we could see the present selloff pick up. April volume remains relatively light compared to March.

The downturn in the 30 Year futures could be a cause for concern for the Federal Reserve, indicating the concept of quantitative easing may not have the desired impact on interest rates.

The S&P futures are popping Thursday pre-market after Wells Fargo announced earnings that blew away analyst estimates. Additionally, the U. S. just released better than expected Trade Balance and Unemployment Claims data, only adding fuel to the fire.

The futures have leapt through our 2nd tier downtrend line and are approaching our 3rd tier as we speak. If the S&P futures can carry their momentum through our 3rd tier downtrend line we should see a retest of April highs and a possible breakout.

The better than expected earnings from Wells Fargo will be met with cheers on the exchange today since investors have been biting their nails over earnings from financials.

The USD/JPY is wrestling with the almighty 100 level again today after briefly dropping below. The USD/JPY strengthened slightly after Japan released a better than excepted trade balance. However, the optimism is faint since a record decline in imports is responsible for the improvement.

Therefore, consumers are tightening their budgets as the economic downturn picks up steam. Japan continues to be the hardest hit in the global economic crisis. Export demand has been cut in half with consumers world-wide losing their taste for durable goods.

The Cable continues to show relative strength on the back of surprisingly positive data surfacing from Britain over the past couple weeks. The GBP/USD kept its cool yesterday despite the broad selloff in U. S. equities and the Cable is running with the EUR/USD and U. S. equities Wednesday morning.

We expect to see the Cable's strength continue as long as Britain's data outperforms and its major financial institutions stay out of the headlines. If U. S. equities and the EUR/USD head north today, the GBP/USD should follow. On the other hand, if U. S. equities selloff again, we may see the Cable hold up once more.

The EUR/USD is strengthening after yesterday's large losses in the wake of a better than expected trade balance number out of Germany coupled with encouraging German factory orders data. Germany's trade balance seems to be bottoming out, indicating stabilization in its export industry.

Though Germany's factory orders data came in below analyst expectations, the number shows a vast improvement from 2009's previous releases. Germany and France are the heavy-weights in the EU economically, so signs of improvement in German production is welcoming news for a beleaguered EUR/USD.

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.