The overnight confirmed the tipping of the slowly topping market conditions with long volume waning over the last few sessions. The Euro and crude sold off hard overnight and the 10-Year rallied both overnight and off the floor open. The gap fill coincides with some nice fade trades today to the short side but as with the last few days we have to watch closely where to enter. It may reject 34.75 which is the edge of virtually all the overnight volume. It may fill the gap partially and reject yesterday’s low at the 36 handle, or it may retest the overnight high at 37.25. We think that is less likely right off the open and will probably be looking at the 36 handle the closest depending on whether it just decides to sell off hard on a test of 34.75 which double topped overnight. There may be a quick scalp fade long over the overnight low at 31.50, but that is really dangerous given the sentiment. You have to watch the order flow VERY closely and be prepared to jump out with a tick or two and trade it with very little risk. If it breaks short, as usual we see no benefit to getting in early which just increases the needed stop. We would wait to get short maybe around 30.75 or so and trade into 29.75 and possibly beyond with at least part of the position. All this sentiment is as of 9:07 AM EST.