Today in a Flash

One of the most dull events was the FOMC release. Besides their delusion that core CPI is trending downwards, just December we saw that's not so. One of the more interesting events was something we've been talking about here since last year around November 6th-the fact that the Fed is about to come under congressional scrutiny from people who actually understand how destructive the Fed can and has been, that would be the Paul family. Today Rand Paul in the Senate (son of Ron Paul who'd like to abolish the Fed and now sits in a position of oversight in Congress) introduced legislation for a FULL AUDIT of the Federal Reserve. As I've been saying, Bernanke is about to have his sheets pulled. This should be incredibly entertaining and hopefully productive. Specifically interesting is this bit, that will strip away the Dodd-Frank bill protecting the Fed's opacity (in bold):

WASHINGTON, D.C. – Today, Senator Rand Paul introduced legislation allowing for a full audit of the Federal Reserve. This legislation is a Senate version of similar legislation long-championed by and introduced this session in the House of Representatives by his father, Congressman Ron Paul of Texas. Co-sponsoring the “Federal Reserve Transparency Act of 2011” (S. 202), are Senators Jim DeMint of South Carolina and David Vitter of Louisiana.

“We must take a critical look at the Fed’s monetary policy decisions, discount window operations, and a host of other things, with a real audit – and not just pay lip-service to the idea of an audit,” Sen. Paul said today. “At a time when we're seeing great volatility in small Euro-zone economies like Greece, Portugal, and Ireland, it is more crucial than ever that we have real transparency at our own central bank.“

The bill will eliminate the current audit restrictions placed on the Government Accountability Office (GAO) and mandate a complete audit of the Federal Reserve to be completed by a firm deadline, finally delivering answers to the American people about how their money is being spent by Washington.

How about a big Hurray! Finally some politicians that WILL do something.

As for the market today, as I said last night, the accumulation we saw on Tuesday highly suggested a green close today. However today we did not see the same level of accumulation, I'll show you.

As far as Price Volume relationships, they're all over the place, nothing can really be gleaned from that information. NFLX did report earnings today and was flying high in after hours, that may carry over into the market tomorrow. Personally I have the service through my Wii and will cancel it. Their idea of new releases is something like "Pretty Woman", the service isn't worth the $9 a month and I'm quite sure NFLX's valuation is quite high. Remember, After hours trading can be very deceiving, it happened to AAPL after earnings up 5%, then they sold the news in regular hours.

Here's a snapshot of the market today -I was surprised that the accumulation we saw Tuesday did not show more promise today. I will say that there was enough on Tuesday to support a couple of days of upside.

Here's the charts:

 SPY 1 min chart. I don't know why my text is printing, but in the white box it should read "good start". It didn't take an hour though before all upside was halted with the first negative divergence. From there, as I said earlier in the day, I'd like to look at 3C at a test of the day's earlier highs, we got that this afternoon and another negative divergence, and look at the volume toward the close-not pretty.

 5 min chart confirms the same thing and the day ends on the nastiest looking 5-min candle of the entire day on the biggest volume of the entire day. Remember, the pros tend to trade the close.

 more confirmation from the 10 min chart.

 and the 15 min chart? Confirmation.

 Now this is a real surprise, enough negative divergences to reach the 60 minute chart, that's saying something as it can take days for the 60 min to be affected.

Looking at the Heiken-Ashi Candles, in the yellow box, we saw a bunch of indecision candles, no momentum, Looking at the Bollinger Bands, we started the day walking the upper band (very bullish), that didn't last long and the wide volatility quickly narrowed significantly-this is a possible sign of a reversal, in either case, it's an inflection point. The closing candles were mixed, but the closing volume was ugly. Look at the volume by price on the left side of the chart where I have a white arrow. There's  lot of sell-side volume in that $129.75 area.

Either way, today was a disappointment. We'll see what tomorrow brings. There's some great trades, a lot of them are shorts, I'd like to see the market move a bit more to get those great set-ups. As I've been saying the past few days, something feels off with the US markets. We know something is off with the Chinese market and Europe? Give it a few days, it'll be back in the fear rotation cycle which should be good for the dollar (see today's dollar post).

Until tomorrow, have a great night.