Futures Update

As I'm working on the Daily Wrap, I noticed there's some interesting action in the futures.

 ES / SPX Futures (E-mini) are going pretty darn negative here, I suspect this is part of the knee jerk reaction as the market digests the full F_O_M_C policy statement which isn't released with the 2 p.m. statement, but after.

The $USDX has a strong intraday leading positive divegrence, this would normally seem bullish as it would move the USD/JPY, however with F_E_D reactions, a strong $USD typically shows the market is unhappy with the statement and is disappointed in the level of "Accommodative policy".

I'm not sure how much a popping $USDX would mean to USD/JPY/ES correlation any way as the carry pair is making lower highs/lower lows.

USD/JPY 5 min chart making lower highs/lower lows with apparent resistance at $102.65, the
$102 level is support and a break of $102 would likely send the pair lower on stops alone.

Furthermore, it's not like the correlation between the carry pair and the Index futures is working right now.

 USD/JPY (green/red) vs ES (purple) 1 min

USD/JPY vs. ES 5 min, in fact the correlation is flipped on its head right now.

And don't look to the correlation rotating to EUR/JPY or AUD/JPY either because it hasn't. The closest correlation is EUR/USD...

EUR/USD (green/red) vs. ES (purple) 5 min.

And in that case..., a stronger $USD would mean a weaker EUR/USD as the Euro already has a negative divegrence and as you saw the $USD a positive.

$USDX divergence, since the USD is the second in the pair, a rising $USD would send the EUR/USD lower, especially if the Euro had a negative divegrence which...

Euro 1 min negative divegrence which is on the 5 min too.

As mentioned above, the $USD would rise or has over the past several years when the market isn't happy with the F_E_D, Treasuries would fall, it just so happens the 30 year Treasury futures also have a divegrence.

30 year Treasury futures.

Gold is the 3rd asset F_E_D watchers keep track of, it typically falls in the same scenario and with a rising $USD, the legacy arbitrage correlation sends Gold lower.

I'll check on the futures again later tonight.