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It's hard to know whether the market is front running inside information such as China's  $500bn yuan QE announced at 11:30, a little after the SPY had made a breakout move, but almost perfectly in line with HYG. Perhaps HYG was reflecting inside information. PErhaps it's just a happy coincidence which I doubt, but it's exactly what we were looking for Friday afternoon in The Week Ahead as well as the follow up, Important Market Update.

From the "week Ahead" post Friday afternoon...

"While I can't pinpoint the exact moment, my guess is HYG is used to boost the market, maybe even our head fake move because the market itself just doesn't have the positive short term divergences to do it alone. However after that, I'll say HYG will be headed straight back down and I'm guessing this happens before the policy announcement on Wednesday. Judging by the scramble toward our set-up targets in several of our short set up plays today, despite a red market, it looks like they are in a hurry to get that move in place and I suspect HYG is going to help early in the week and then retreat before the market.

So rather than last week's "More of the same" sideways chop, I think the SPX's downtrend of lower highs and lower lows I have posted several times this week is a target for technical traders and HYG will likely sponsor the move, however breadth and 3C charts are so weak, that's the time to use any strength as charts like FSLR and SCTY that are up today, are so VERY close to the targets they need to hit. That's when we want to get those positions, not that having them now is a problem, I'm just looking at the best timing."

Perhaps the 12-ish Jon Hilsenrath's 11:20-ish WSJ article (the unofficial mouthpiece of the F_E_D) hinting that the "Considerable Time" language will remain in tomorrow's F_O_M_C which would probably inspire a knee jerk reaction such as the one we have been talking about as a help to the market's current move.

In any case, as I have said, the move won't "look" easy to sell/short in to, but this is what we have been looking for on a longer term head fake basis and certainly on a short term HYG divergence basis.

 Here's HYG's divergence, 3C forecasting a move higher in HYG which is what we expected to sponsor the market bounce from Friday's deeply oversold breadth which continued right in to yesterday.

 Here's HYG vs the SPY (green) moving almost tick for tick intraday. Again, EXACTLY what we expected last week for this week and ahead of the F_O_M_C...

HYG and SPY again...

And here was the minimum SPY target, break the downtrend as that will get technical buyers in the game which you can see worked as volume climbed on the break through the downtrend channel.

On a 4 hour chart showing all of the August cycle and the stage 3 top, we had been expecting an Igloo with a chimney top, the chimney being a head fake move, we aren't there yet, but the concept says the probability is usually about 80% before a downside reversal (more serious than the downtrend channel).

So, thus far we have exactly what we are looking for and on some interesting news, perhaps more tomorrow if the WSJ's,   Hilsenrath is really leaking F_O_M_C information for them. Thus I'll be posting targets on the upside for assets that are right in the right area and position, some will have already been hit, but you can see that once you find the ones you are interested in.

As for the Chinese QE or stealth QE, the PBoC (China's Central Bank) will be providing $500bn in liquidity to China's top 5 banks through their "Short Term Lending Facility", each gets $100 bn yuan, this may sound like good market news, but the fact is, after the recent Chinese data (not to mention the Asian markets discussed this morning with the largest drop in the Shanghai Comp in 6 months), they are in trouble, this is more a bank bailout than anything else.

We'll get deeper in to the Chinese Bank bailout later and perhaps Hilsenrath's newest F_E_D rumors, but for now, I want to get some of those target levels out for assets /that have been either short sale set-ups, are current short positions or partial shorts as we have been waiting for a bounce to fill out the rest, they're on their way...