A Surprise?

Recently any down day is somewhat surprising considering the Fed's self appointed mandate which stands out on a chart like a soar thumb, however, there were several charts last week, I won't run through all of them, that have given us a peak into a change of character that has been taking place. Taken together with Fed comments, PIMCO's repositioning of it's portfolio and deleveraging, the high margin debt of traders and various other issues like the strange activity in the bond market, there have been many hints that something was brewing which is what led me to make the recent videos warning of the downside dangers in this market that are without precedent.

Here are a few select charts that show  radical change in character. While looking at these charts, remember that the market rarely goes from a bullish mod to a bearish mood in a day, it takes time to de leverage, set up shorts, distribute longs, create the game board so to speak so the market's recent inability to discount world events as of now, doesn't seem like it forgot, just that it took some time to get the pieces in place.

Here are the charts that shouted something was up... (recall Friday's end of day post in which I said 3C showed significant weakness going into the close-which manifested today-again, it takes time to set the board).

FXP 15 min chart with over a week's accumulation .

 FAZ's 60 minute chart  with nearly 2 weeks of accumulation-don't forget about Friday's XLF chart starting to look bad.

USO 2 weeks of accumulation into the dip as expected, the idea was "oil is going up, but they will build a position before they allow it to move higher, they built that position into lower prices".

These charts show the way the market works in real life. Study them and understand them. Understand how smart money isn't going to let an opportunity go by without taking advantage of it and this is why the market often seems to behave in strange ways.