The 30 Year T-Bond futures tumbled yesterday in reaction to the huge surge in U. S. equities. Even though the 30 Year futures sold off, they are holding comfortably above March lows on Wednesday morning.

Therefore, the futures are trying to hold onto the uptrend while avoiding our 2nd tier downtrend line. The lack of commitment to the downside in the 30 Year futures shows traders aren’t entirely convinced by the rally in the S&P futures on Tuesday.

Crude futures declined yesterday despite a huge rally in equities. The fact Crude didn’t follow the S&P to the upside is confusing, and a bit discouraging for the bulls. Meanwhile, Crude has dipped below our downtrend line, indicating we could witness a continued selloff until our 2nd tier uptrend line.

The U. S. will release Crude Oil Inventories today. Analysts are expecting an increase of 0.1M barrels. If the number should come in higher than expected coupled with profit-taking in U. S. equities, this would provide the fuel for a sharp movement to the downside.

Gold dropped on Tuesday, exercising its negative correlation with U. S. equities to the full extent by dipping below the highly psychological $900/oz level. However, the precious metal is finding support on our 1st tier trend line on Wednesday and has fought back to $900/oz.

The question becomes whether U. S. equities can follow through on yesterday’s impressive rally, or if Tuesday’s surge was merely a head-fake. If the S&P does continue upwards and Gold sinks below our 1st tier uptrend line, then we could witness a near-term crash in the precious metal.

The next few trading sessions will certainly be telling as far as trend is concerned. Fundamentally, we find resistances of $906.42/oz, $913.80/oz, $919.01/oz, and $922.92/oz.

The USD/JPY confirms the lack of FX investor excitement concerning the massive rally on Wall Street. The USD/JPY moved sideways showing indifference to a surging S&P.

Even though Japan’s Core Machinery Orders experienced a hefty decline, the number came in better than analyst expectations. Therefore, investors are questioning whether the Japanese or U. S. economy is performing better right now. If Japanese data continues to beat expectations while U. S. disappoints, then we could witness a return to the negative correlation between the USD/JPY and S&P futures.

Rate follows GBP in two-way action, holding support now above the 1.2720 area. Aggressive traders can add to open longs on this dip but BE CAREFUL as volatility is just huge. Test of today's lows likely at this point but traders note big names on the buy side on dips under the 1.2600 and 1.2620 area.

Upside stops likely cleared at the overhead resistance at 1.2720/30 area now with stops likely the other side. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week.