STRATEGIC AND TACTICAL

I'M GETTING THE FEELING THT OUR STRATEGIC VIEW AND THE TACTICAL EXECUTION OF THE STRATEGIC VIEW HAPPENS TO BE NEARLY PERFECTLY ALIGNED.

As I ALWAYS warn, F_E_D events almost always cause a knee jerk effect, but it may be this knee jerk effect we are seeing on the charts if indeed Bernie's Jackson Hole Speech tomorrow is either leaked, or obvious enough as to the outcome that Wall Street is setting up plans in to the event, which coincides with the weekly option expiration.

Looking at the Risk Asset Layout seems to confirm this, there are only a few questions left open as to the set up, most center on credit, but credit is also VERY near breakout highs which means probable head fake highs.

Here are some of the charts that relay this view in addition to the last two previous posts, if so, then our weekly call positioning, our longer term core positioning and patience in opening September/October Puts may be about to pay off all in the next day or so.

Unfortunately the charts didn't load in the order I wanted, we'll have to make due.

 Energy, remove the noise with a 4 hour chart and the last turn down was a fairly small divergence, although it seemed large at the time, it is dwarfed by the size of the current leading negative,

 The same is true of the USO 4 hour chart, the first divergence sending USO lower is dwarfed by the current one, this makes me confident in USO core shorts as well as September puts.

 In fact, I may consider adding to USO puts in to October expiration if we get a move above the white trend line area or above recent resistance,

 Financials are actually leading the market right now, a Financial position in both short term weekly calls and perhaps tomorrow longer term puts may make a lot of sense, the 1 min chart was positive, but is already seeing a negative divergence as Financials have gained a bit today.

 Financials leading negative on the hourly is intense, stronger than the last major reversal.

 Tech is still showing an intraday positive, as I said AAPL/BIDU look ready to pounce.

 However as early as 5 mins, the leading negative in tech is overwhelming, possibly strong selling in momentum names like AAPL on any bit of strength.

 Yields have been an excellent leading indicator, they remain negatively divergent.

 If the SPX moves like this tomorrow and yields like this, we'll have an even bigger dislocation which have called the previous 3 major reversals.

 The $AUD seems to be in line today...

 The $AUD longer term is very dislocated, it also has called the last 3 major reversals with signals like this.

 When we had Euro strength in white, I showed you the 3C charts and that it wouldn't last, the next day (yesterday ) it fell apart and today the SPX reacted, they are short term converged, I don't expect this will last long, but I do think it will lead to lower Euro/SPX prices.

 HY Credit isn't in sync with the market intraday, it's not doing much. I have questions about junk and corporate credit, I'll look closer in to those.

 Energy was weak yesterday, today it's in line as the SPX fell.

 I'm expecting a short term pop in energy, thus the reason for looking for USO to break resistance to add shorts/Puts tomorrow.

 Momentum in Financials was weak yesterday, the SPX paid for it today, but now it is leading, this is why short term I'd be looking at FAS or an ultra long Financials, but ONLY VERY short term-remember Reg. T for day trading. After that, I'm looking to short Financial price strength, perhaps tomorrow, perhaps even early tomorrow.

 Tech is in line with the market the last 2 days.

I'll follow up with additional clues/insights. However I get the feeling we are very much on the right track.