Lets start with the market update as it's faster, I'll use the SPY as an example, it has the best proxy signals for the rest of the market.
Intraday 1 min SPY shows distribution early at the open and some small accumulation that looks like an afternoon bounce in to the close.
The 2 min chart shows no such bounce meaning it's likely weak and the majority of the action today has not been positive in any way.
The 3 min chart is leading to a new negative low, this is rare with price moving down as the street rarely sells in to lower prices.
And the 5 min is also hitting a new leading negative low intraday.
If you follow the yellow arrows this is the VERY basic concept of what I expect in to the afternoon, perhaps early next week as window dressing is completed.
QQQ intraday also showing a probable EOD bounce signal,
is it enough for me to even day trade? No I wouldn't take that risk, especially as Russia / Ukraine is more of a wild card this weekend than last, we knew what to expect last weekend.
And the IWM with distribution at the intraday highs, and a small 1 min positive at the lows. There's no other significant signals intraday in these charts beyond the SPY.
However the Leading Indicators tend to confirm my tentative thoughts about early next week and window dressing,
this doesn't stretch as far as a tradable bounce right now, it just tells me it's likely the VXX reversal process will look mature and complete by the time we are ready for the reversal and that's where I want to enter the majority of short positions that I'm interested in and wrap up any market correlated long exposure as I think as we move to April we will see a much different tone once the quarter's end window dressing is complete.
*LEADING INDICATORS ARE ALWAYS COMPARED TO THE SPY/SPX (GREEN) UNLESS OTHERWISE NOTED.
HYG (High Yield Corp. Credit- the manipulation lever)... You can see an outperformance of HYG vs the SPX correlation which suggests some short term upside for the market, that may be in to the close or even in to early next week,
this does not suggest any serious upside whatsoever, more along the lines of ranging in the area we have been in the last several days thus far.
High Yield Credit which is not used as a lever and therefore has no manipulation relationship was selling off yesterday which is appropriate considering today's action and has seen a little better relative performance today going in to the close.
As for our sentiment indicators (professional, not retail) they were selling off yesterday, again appropriate and have seen a little strength today, but again
I stress a "little".
Our second sentiment indicator is confirming the exact same as the one above.
This is VXX vs the SPX correlation, to do so since they move opposite each other I've inverted the SPX prices and you can see that VXX or short term VIX futures have lagged or seen a little relative weakness vs the SPX which is to be expected if you recall the reversal process map I drew for VXX, ultimately this is a strong signal for VXX as it needs that reversal process to move to the next stage (VXX up/market down).
In addition VIX Futures have shown they have used the lower prices today to accumulate which is exactly why we wanted them lower last Friday so this is why I say this is a good signal ultimately as far as the purpose of this week's price action.
As for VXX...
We also see accumulation in VXX (short term VIX futures) today.
More importantly, the entire larger picture process that we foresaw happening this week as of last Friday afternoon, has happened EXACTLY as envisioned, which is good for our market positions and opportunities in the coming days.
The 5 min chart is not only leading positive in a big way, but the reversal process that seemed like it may not complete on Wednesday's F_O_M_C policy announcement as the knee jerk lower in the market sent it higher, has done as expected and come back down to the rounding reversal process and continued to accumulate,
the entire point was and is smart money doesn't chase nor do we, this is the process that needs to happen as a timing cue/trigger as the larger VIX position is already in place, THIS WOULD BE AKIN TO THE FUSE.
As for the market's lever helping to push stocks higher which was really all about moving VXX lower, we see continued deterioration signaling that we are approaching the end of the mini-cycle, VXX should have flying leading divergences soon while HYG should be ready to drop like a rock with the market soon.
Absolutely no acumulation or even in line status in HYG intraday, distribution continues the unwind of the position which is the only thing holding the market together right now and I believe for the express purpose of allowing smart money to finish putting on protection in VIX futures.
The 3 min chart as we saw started distribution earlier this week, that has increased every day since and today it's leading negative on a fairly strong intraday timeframe.
And the 5 min chart, earlier in the week we had NO negative divegrence and I was looking forward to the 5 min chart showing something, now it is leading negative in a large way, *NOTE THERE'S BEEN NO ACCUMULATION IN HYG SO IF THE MARKET SEES ANY UPSIDE WHATSOEVER IT'S LIKELY TO BE WEAK AS THE ONLY ASSET SUPPORTING IT IS SHOWING DISTRIBUTION IN ALL TIMEFRAMES.
TLT/20+ YEAR TREASURIES OR THE "FLIGHT TO SAFETY " TRADE VS INVERTED SPX/SPY PRICES SHOWS THE "FLIGHT TO SAFETY" TRADE IS IN FULL SWING AS YOU'D EXPECT WITH THE FLIGHT TO PROTECTION IN VXX.
Interestingly, commodities have been slammed because of the Chinese unwind and cash calls,
however as noted earlier today, I think we have a chance for a copper short squeeze and entered JJC long for that trade earlier today...
Note how commodities are not falling like they have been, but rather ranging as we often see when there's accumulation, THIS JUST MAKES OUT JJC LONG TRADE A HIGHER PROBABILITY SUCCESSFUL TRADE.
And finally the patron carry saint for the market, AUD/JPY is in line and able to offer intraday support for a bounce in to the close, I WOULD NOT READ ANY FURTHER IN TO IT THAN TODAY.
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