What I noticed early today was that even the daily signals we've been able to ply pretty effectively were starting to get sloppy, but later in the day something changed and there were quite a few stocks on the long side looking better than I'd expect, even AAPL with it's performance today had some decent underlying 3C signals. The futures as well and you might have noticed the weekly QQQ put was a week further out, that was a little uncertainty I was feeling with those signals popping up, with Credit acting better than it has recently.
However after taking some time away from those thoughts, I came to the realization that these were some changes that happened in the second half of the day, it's not a large trend, it's not something that's been there for days or weeks and there was deterioration in to the close.
The VIX wasn't that impressed with the market today and we saw that early on in VXX and UVXY signals which were pretty strong intraday.
Futures had me a bit concerned, but as the night wears on they are starting to loo like themselves again.
Volatility is doing what I said...
As I said toward the end of the day, some of the strength I was growing suspicious over started showing weakness.
QQQ 15 m
IWM 5m
As for the Dominant Price/Volume relationship, interesting, there weren't too many that were dominant, rather they had a co-dominance that was Price Up/Volume Up which is the most bullish and Price Up/Volume Down which is the most bearish -these are short term as in next day, but...
So I got to thinking and I now the ECB's rate decision comes up Thursday, we could see some movement in to that rate decision, perhaps even bullish and then a sell the decision type move.
I think most people wouldn't expect the ECB to do anything with rates, but since Germany printed a negative GDP number, a lower Euro would certainly help exports and maybe keep Germany out of a recession, so maybe they move rates and send the Euro plummeting or they can leave it alone and pretend Europe is strong because of the currency, but everyone knows different.
So Thursday, a move from the ECB could send the Euro plummeting, that would not be good for the market and if consensus id that is the most likely course, then one last Hoorah to the upside while they still can would make sense, it would also gel with some of the more bullish looking longs I saw here and there today. This is why I wasn't actively calling out a bunch of shorts today and why I too the weekly QQQ puts, but next week instead of this week like we have been doing.
The bottom line really comes down to the fact that there were all the signals expected until the second half of the day and there were some changes, but a half a day is hardly reason to go changing anything, it's a blip on the screen, maybe it looks significant in price, maybe not, but it certainly doesn't change anything of importance to me.
If things change dramatically, then I'll be more concerned about whether I'm on the right track, but the timing today and the ECB on Thursday, it seems to me like perfect time to make one last run and that may be why credit looked a little better today, but Credit is SOOOO far away from being close to normal, I don't have any concerns there.
For now I'll stick with the positions called out, some scattered longs, some scattered shorts and look for a chance to use price strength to short in to with 3C signals that are moving the right direction in to any price strength.
I really feel that this is more about the ECB than anything as this is the first time they may actually have to do something and that something would throw the carry trades in to a dizzying orbit of pain, we could very well see the gut feeling quick move up and gigantic move down if that happens, remember that was my gut feeling for the actual reversal?
If anything comes up, I'll post it for sure.
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