We are kind of in a holding pattern. Yesterday’s volume picture was pretty mild considering the magnitude of the sell-off. Not a whole lot of participation by large traders though it is important to note that they were net long yesterday and may be positioning for a bet on a strong jobs number tomorrow. Overnight despite the ranging conditions they have become even more net long on moderate relative volume. The Euro, 10s and 2s have flattened and the carry trade gets a boost with the weakening Yen overnight. All things considered we are biased at least slightly to the long side, though there is strong resistance overhead beginning at the OH and extending all the way up to the extremely strong line centered around the daily & Globex R1 around 86/87. If we do stretch out to the long side we will have a lot of trouble getting through there. The rejection trade is actually just above it although many traders will likely look to sell those levels today if we get there. The jobs number tomorrow is really going to determine whether we continue to grind down or retest the 90s through 1100 again in our view. I think ahead of any significant news we may calm down a bit today and I think the VIX behavior off the open will be relatively telling as to what the pace will be today relative to index option activity. I doubt we will see significant accumulation or distribution in the baskets today though. All eyes on Europe still so we will be watching the EUR closely and the carry cross which may help offset declines in the Euro with the weak Yen. In fact, I’m of the opinion that the weak Yen may be the most significant reason for the current price action as it holds up the Euro in the carry trade making for good arbitrage/spread ops there. If sector activity is mixed as expected, fading the edges should be noisy enough to produce lots of rotational activity. The best conditions for our trading are the ones where we don’t have to be right about direction to win. In ranging conditions we get the “free” trades at key levels in addition which win on the volatility itself.