It would not be surprising to see, based on the macro trading background in Europe this morning, some bounce off the open, but it would be surprising to see a sharp V-shaped rally following Friday’s data.

One of the more pivotal ETF’s that Clive Corcoran will have on his watch list today is SHY, the iShares Barclays 1-3 Year Treasury Bond fund.

The rising lows are certainly a positive sign on the chart for the S&P 500, and once again the FX background looks reasonably supportive that the 1100 barrier can be mounted.

The flight-to-safety appetite for the Japanese yen is not in evidence this morning, and Clive Corcoran would not be surprised to see a relief rally when US equities open for trading today.

There is a growing probability that the S&P 500 Index will need to revisit the 870 level again in the next 12 months.

The clue to near-term direction for US equities is now, more so than at most times, to be found in the FX markets and in particular the direction of the euro and the yen.

If the yen continues to strengthen against other FX carry trade currency favorites, there is an increasing likelihood of market mayhem and disorderly liquidations across a number of asset classes.

Clive Corcoran suggests monitoring the critical level of 80 on the AUD/JPY cross rate for clues as to market direction.

Clive Corcoran would not be surprised to see the S&P 500 futures index attempt to rally today when trading opens in the US. The 1150 level should provide a strong layer of resistance with even more above that at 1160.

The chart for the S&P 500 June e-mini futures contract shows a pattern which, if confirmed today, could see a test of the 1130 level.