Stocks turned sharply lower in the last 12 hours based on 10-year U.S. T-Notes and the correlation with the E-mini S&P 500. Key for that move down was a breakout of an ending diagonal seen on the 10-year, which was a confirmation for a turn into a risk-off mode for stocks. The E-mini S&P 500 lost around 70 points down from latest swing high on intraday chart, so we now see index in Wave five, which means there is room for another 40 to 50-point drop while 10-year is underway up into Wave four rally toward 122'00.

10-year U.S. Notes, S&P 500, 2-hour

DAX

The Dax is also turning down, now seen in an intraday impulsive decline from around 12000, so it's a fifth Wave underway beneath 11670 and possibly even down to 11500.

German DAX, 1-hour