Friday Semi-Wrap

There's  a lot to look at closely today before I would dare give a simple wrap of the day. There were some events that seem well planned, the reason is more of a mystery, there are some serious contradictions and there are some serious implications.

It's sometimes hard to remember that the average price move today was -0.43%, it felt a lot more volatile than that when watching every tick. The NDX was the big loser at -.95%, the Russell 2000 was the best performer at almost unchanged -0.08% and on average the Dow and SPX came in at -0.25% and -0.43%, these aren't big moves.

If I HAD to sum up today and in a simplistic view, I'd probably guess that weekly options expiration pins seem to be gaining more and more momentum, whether more people are using the weeklies or light overall volume in the market is playing a part, that is what it felt like, but that is somewhat biased by a string of these weekly expiration Friday's showing some real reasons to believe such as closes that are 2 cents off causing a contract to expire worthless, but I think there was a lot more going on today than just that.

A few things that were exceptionally strange included the following:

 The triangle in most averages, but particularly noticeable in the NASDAQ 100 / QQQ was strangely very noticeable in the NYSE TICK data (Number of NYSE stocks closing up for that bar less the number closing down. The range for the TICK data was also strange, until the triangle saw the downside break mentioned here before it happened... note the range barely crossed below -500 and spent a lot of time at +750 to +1000, this is strange because +/- 500 is a very mundane reading, it's what you see when there's nothing going on on the market, +1000 isn't an extreme, it's strong, but what was strange is how much time was spent in the area. Even on the break of the triangle with volume jumping up we didn't see a -1000 reading once! Typically we'd be seeing extremes like -1250 to -1500.

 In fact, the upside Tick was stronger than the downside in a break below a price pattern!

 The Euro which has a positive correlation with the market was strong today, the market typically follows it as you can see to the left, today the Euro was quite strong along with the $AUD and the market wasn't budging, except commodities were following the correlation nearly perfectly and they are a risk asset so it's not like there was a "Risk off" mood prevailing.

 This is the $US Dollar (orange) vs the S&P (green) so you can see the inverse or mirror opposite relationship that normally exists.

 Here's a closer view of the same.

However today the S&P followed the dollar, something it shouldn't do, if commodities had done the same I would simply call it a fear of carrying any risk assets long, but commodities did move up on a weak dollar as they should.

Other oddities included a number of leading indicators positive all day or most of the day hinting at the market getting ready to take on risk to the upside.

Transports (if you are familiar with Dow Theory) broke a nearly 9 month trendline down and move up through it. There were more oddities than I can list, but since the F_O_M_C we have had 3 down days, last time we had 2 up days before a trend change. Remember what I warned about, the knee-jerk effect and it almost always being wrong. So are we on the edge of a big upside reversal with the last 3 days being the knee-jerk reaction?

I don't think the answer is that simple so I have a lot of work this weekend, a lot of charts to look at. I think I could say the F_O_M_C knee-jerk effect could be more likely than a weekly op-ex pin.

I'm also going to try to get out that head fake article and maybe one more on an HFT strategy I've noticed a lot lately.

Enjoy your weekend, I'll let you know what I find.