On the heels of some chaotic overseas trading, it appears  that things may be about to go horribly wrong.

 (King World News) – A portion of today’s note from legend Art Cashin:  Handicapping The Final Tax Bill – Conventional wisdom says that given the very narrow vote in the Senate vote on the tax bill, the final version should be little changed from what originally passed the Senate. If so, that could be a problem.

For example, in the Senate version, they have some form of alternative minimal tax on individuals and corporations. Some companies claim that a corporate AMT could well result in them ultimately paying more corporate taxes than they currently do. That would be a major problem for the stock market.

The Senate version is also more restrictive on deductions for interest expenses by business. That is also not market friendly.

Further, the Senate version is not scheduled to kick in corporate tax cuts until 2019 rather than 2018. The first time that was mentioned, the stock market sold off smartly.

There are other differences between the bills but these are the ones that I believe the market would be most sensitive to.

Overnight And Overseas – In Asia, stocks got pounded. Tokyo was down the equivalent of 490 Dow points. Hong Kong was hit even harder. There was more moderate selling in Shanghai and in India.

European markets were also weaker but nowhere near as sharply as seen in Asia.

In other assets, gold is up a bit but crude is lower as API data showed crude inventory fell smartly but the aggregate inventory rose three million barrels. The euro is a shade lower against the dollar, while yields are unchanged.

Consensus – Looks like we may be in for another choppy post-reversal day. On any weakness, the 6755 in Nasdaq needs to hold. All eyes remain on Washington. Sharp selloff in Asia did not spill over into Europe.

Stick with the drill – stay wary, alert and very, very nimble.

Also, this from Andrew Adams at Raymond James…

What the Semis Do Next Could Help Decide What the Market Does Next
Last week we called attention to the Semiconductor Index hitting the upper end of its long-term bullish channel and advised some caution as a result. The SOX responded by dropping extremely hard, so much so that the index is now back near the lower end of the channel that will hopefully now offer support. The lower end of the channel is extra important because, as mentioned, the semiconductors often act as a leading indicator for the broad market and additional weakness may be a sign that the major indices could be next to see a drop.