Beware the Knee Jerk- Uncertainty, Meet the Market.

If there's one thing the market hates more than anything it's uncertainty right to the point of the market maxim, "When the missiles fly, it's time to buy". This could be misinterpreted as the market celebrates and buys war, that is not what the phrase means. What it means is in the run-up to a potential war with all of the saber rattling, the market is in a state of uncertainty as to the future, it doesn't know how to discount the future because this is an event the market has no control over. Thus when the missiles fly , the uncertainty has been removed and the market can start to figure out how to discount events.

Despite the obligatory Knee-Jerk reaction which we see as posted earlier and before every F_E_D event, is about 90% of the time (both up and down or both in a matter of an hour), the one thing that happened today is the F_E_D re-inttrodcued uncertainty, the one thing the market has lived without since the 2009 lows with the Bernankle put in place.

Don't be too quick to judge the market on today's parabolic move (which are not to be trusted any way), it looks like there may have been a leak as not only the unofficial F_E_D mouthpiece Jon Hilsenrath predicted earlier today the F_E_D would introduce uncertainty for the first time in 6 years, but also put the market on notice that the dreaded June rate hike is very much in the cards. 

Lets not forget the market as of this morning still had a pretty decent tank of gas and out recent (yesterday) upside target projections for the Q's and SPY have been met at least on an intraday basis.


As we saw earlier today, the VXX, HYG and TLT intraday signals were not consistent and many were in line with an attempt to move the market higher short term, longer term or bigger picture, the 10-15 min charts have a very sturdy divergence and a very different tone, see the update from earlier....Levers

This is not posted as filler, but as real signals that haven't made a move as of yet and need to be considered, however so do the 10-15 min very solid signals and I'll update these again shortly.

I stopped just short of calling the EUR/USD move and specifically the $USD divegrence, a leak , perhaps it wasn't a leak but the same logic I put forth last night that if the F_E_D was going to, for the first time since 2008/2009 no longer coddle the market with ABSOLUTE, unwavering certainty, but let uncertainty lose again (Did you see the story today about the 17 year old hedge fund manager? A kid in high school running his own fund, a kid who's never seen a  bear market or interest rate hike, that's how easy the market appears to be, everyone's a genius until they are not), then it was likely the F_E_D would throw the market some dove-bone, which doesn't amount to a hill of beans and the market knows this. "PAtience was removed, a June rate hike is VERY much on the table". After the parabolic knee jerk dies down, that's all that matters at the end of the day.


As to the Index futures, which may be a little too early to look at on these timeframes, we have the divergences now that we didn't have this morning, courtesy of not only a parabolic move which I never trust, but the very common F_E_D based knee jerk reaction which is almost ALWAYS wrong and present about 90% of the time.

 ES 7 min with non-confirmation.

 NQ 7 min with non-confirmation

7 min TF with the same.

And the 10 min Es chart where the majority of the bounce divergence lived is negatively divergent, NQ looks EXACTLY the same, TF looks worse.

There's more to come, I just have to get to an astounding number of cross correlated assets.