Futures Charts

First of all, the theory was right, perfectly right. It's no coincidence that after 2 trading weeks of being about 0.20% away from the SPX new high, that it was pulled off today with the Dow, before a 3 day weekend and will be splashed all over the news so when people return to work on Monday and have to make decisions about allocations to IRA's, 401ks, mutual funds and the like, they have had 3 days of brainwashing to get the greed effect burning strong, this is exactly what the theory was, this is exactly what happened.

I'm not going to go in to the flight to safety by smart money across the globe, but everywhere in our market, they obviously are prepared for something and those somethings are what they love to hand off to dumb money just like they did in 2007 when on the new high and last high, CNBC was pushing the book, "Dow 20,000". The playbook is simple, the house wins, the little guys are left holding the bag, over and over and over.

As for the futures, interesting, VERY little 3C movement ANYWHERE other than what had been set up earlier in the week so since none of those divergences were crushed as very little happened, I see no reason to change course as the winds haven't changed anything.

CONTEXT and SPY Arbitrage both show risk assets running the other way as both went higher this afternoon. I'll know more about this after an update.

CONTEXT was positive when it needed it, during the overnight low volume ramp (the easiest time to do it) and during the morning when some bad US economic news hit the wires, after that, risk assets moved off in a different direction than equities.

 SPY Arb is similar, positive during some negative reports and then again around $1.30 when the SPX previous highs needed to be pushed through.

Remember the strange divergences running straight up, I couldn't find what was causing them so I was left to the only other answer, smart money knew something the rest of us didn't and that was, "We are taking the SPX to the new high" .

 ES 1 min was in line most of the day, the only exception was that leading positive divergence that kept getting stronger. See the last chart at the bottom of the linked post, the updated ES chart that was moving so fast that I had to recapture it while I was writing the post.

 ES 5 min is starting to move toward the reliable short term 5 min option trade negative divergences, it needs some more price upside which dumb money can give it and a worsening divergence, I think it will happen based on other charts.

 NQ generally in line all day except for the time when it was also leading.

 NQ 5 min is a lot closer to that 5 min negative divergence (Buy QQQ Puts) signal, this is why I think Es will follow. Smart money wants dumb money to enter so they can hand off shares or sell them short, it should all show up in 3C.

 TF/R2K 1 min also in line

 However 5 min is much more negative

 I couldn't get a feel at all for the EUR/USD so I had to look at the single currency futures, the Euro above is negative.

The dollar is positive, not the best divergences, but I'd guess the EUR/USD sees more downside, less support for the market.

Still, even though we saw through Wall Street's trick even when futures were at overnight lows, the best is yet to come, it's the movement from risk assets to safe haven assets that is truly staggering.

I still like the short term and longer term positioning in options and the longer term positioning in equities, I think they are right on track now that what we suspected would happen actually did happen.