The S&P futures are experiencing a brisk selloff despite BofA earnings coming in far above analyst expectations. The weakness comes as the U. S. government hints that it will likely convert its preferred shares in banks to common shares as opposed to asking Congress for more funding.

In effect, the government will have a controlling stake in several banks, meaning they could finally be giving into nationalization. The reality of nationalization is hitting equities hard, and implies that the capital ratios of some banks undergoing `stress tests' are questionable.

The news sets off a domino effect, making investors question the results of the `stress tests', raising uncertainty and placing large downward pressure on equities.

The 30 Year T-Bond futures are recovering from Friday's large selloff that saw new April lows. The strength in the 30 Year futures comes in reaction to the large selloff taking place on Wall Street today.

However, despite the present pop in the 30 Year futures, they have been exhibiting clear behavior of a downtrend. Both near-term and medium-term downtrends are in play, as displayed by our 2nd and 3rd tier downtrend lines. Despite the inherent negativity, the 30 Year futures still have February and March lows to fall back on.

The USD/JPY continued its slight selloff despite a late session rally in U. S. equities. We still don't feel the present pullback in the USD/JPY is backbreaking, yet.

The currency pair has our 2nd tier uptrend line to rely on for the time being. However, as we stated before, the uptrend is extremely young compared to the downtrend, giving the downside precedence.

On the other hand, everybody knew the crucial 100 level would be a tedious obstacle to overcome. We continue to witness a battle of the economies.

The Cable has come well-off its highs on relatively light volume in what we view as healthy profit taking. As expected, the Cable is having some trouble leaving behind the highly psychological 1.50 level.

The weakness of the Pound is reflected in the EUR/GBP finally finding a bottom. The present downturn in the GBP/USD was triggered by no discernable news/data, which leads us to our conclusion of fundamental profit-taking.

Although the Cable has dipped below our 2nd tier uptrend line and April 6 highs in the process, the currency pair managed to stabilize above April 15 lows.

Not much has changed in gold as it trades sideways between our 1st and 2nd tier downtrend lines. The precious metal has given us no reason to alter our negative stance and gold certainly has its hands full with the psychological $900/oz and our 2nd tier downtrend line.

We anticipate gold to gravitate towards its natural negative correlation with U. S. equities during critical moments. Hence, the precious metal is still hinting at another breakout in the S&P futures with the back of the uptrend broken.