Sunday, March 3, 2013

Futures moving a little

Since the last check, we have some movement in futures, still not a lot, but some 3C signals are taking shape, while they are still young, they are moving in the expected direction. It appears from the FX charts that there's some strength starting to develop in the JPY futures, 3C seems to confirm this as well, the Yen rising is not good for the market, it's not good for the carry trade currecies that are largely traded in baskets for diversification, but they Yen figures in most of those pairs so before we look at the futures market indices, lets look at one possible driver of lower prices in the market...

 The 5 min Yen/JPY futures has a pretty decent size positive divergence, it has been flat since late Friday and this week's open, but now it's starting to move up in the direction of the divergence.

 As mentioned earlier, the EUR/USD is one of the many pairs that really looks unremarkable and pretty flat, but...

 The EUR/JPY is showing weakness in the Euro vs. the Yen, similar to what we see on the Yen futures chart above.

 The USD is also seeing some weakness vs the Yen after a pretty flat open.

The AUD has seen the most movement vs the Yen.

 This is the SPX futures 1 min which has a small positive, but this can move around a lot overnight.

 More importantly the 5 in chart is seeing a change in character, for the entire month of February we had been seeing a negative divergence like the one to the left in which we entered SPY, QQQ or IWM puts, but then we'd typically see a positive divergence and enter calls and then another negative and back and forth we went. This is the first time since we started trading the weekly options that there have been two consecutive negative divergences and this one is looking a bit worse than it appears at first, 3C made a lower low while price made a higher low, that makes this a larger negative divergence.

 The 1 min NQ/NASDAQ futures are pretty much in line

The 5 min though is seeing the same second consecutive negative divergence with a new leading negative 3C  low so far tonight.

The currencies have given us a lot of good clues, hints/signals among other assets and indicators and it appears, at least very early on, that they re hinting toward more weakness in the market. As I always point out, this is an overnight market, there's a lot of time before the open and there are a lot of markets that are not open so I'm not making any big forecasts here, but this is a change in the opening FX/Futures market which was very dull and flat earlier, it was at least worth a post to keep you in the know as things develop.

Have a good night, I'll see you in the morning.

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