Pre-market thoughts - Monday 11th April

Today we have the official start of the earnings season. We also had another Earthquake in Japan, oil and gold have come off it's highs. We had a decent sell off last Friday with the term structure tightening on the SPX options. Today is going to be an important day as it reveal a lot about how real last week's sell off was. ie if we spend a lot of time auctioning at these price levels it will mean that the market is accepting value at these levels and the market is less bullish overall. A quick bounce and rally back to higher price levels will invalidate the sell off from last Friday somewhat and make a good case for the market to go higher. Gap stats aren't great for fading today's gaps (and I will pass) even though they are small. Quant studies also seem to suggest a bullish edge early this week so the open today is going to be all important. We shall see.............