Opening Indications

Last night in this post, "Headline: Dow New Highs- Not a Surprise" I showed several charts such as the negative divergences in assets like High Yield Corp. Credit that was following the SPX in price, but was showing underlying weakness, the point was as I posted last night, "Bot everything is as it appears".

It's very early in the day and there's still a lot of moves in the market that are of little significance as far as analysis goes, they are more about profit opportunities, hitting stops, triggering orders, etc whether it be for something big like setting up positions and leaving retail holding the bag or whether they are simple profit from the bid/ask spread and order flow/volume rebates.

In any case, there are some interesting signs on the open that are a bit bigger than the typical a.m. games.

 On the open commodities have turned south vs the SPX (green), which is not a typical reaction for a risk on move, the driver of the move in commodities seems to be strength in the $USD.

 Here are commodities again this morning vs the $USD in green, note the $USD has moved up which pressures nearly every risk asset.

Here's the $USD vs. the SPY on the open, this is a lot more pressure on the market than we saw yesterday.

On the other side of that coin, the Euro is falling against the SPX, not a direct negative impact, but a sign of one as the $USD is likely higher with a lower Euro as we saw above.

 The Yen is still supporting the market as it is lower, this is what I said last night would likely be the pivot currency for today, perhaps the pivot asset.

 Here's a longer term view of the correlation between the falling Yen and the rising market, but recently the Yen has moved from a solid downtrend to a lateral move, it's changes in character that lead to changes in tend, a move up in the Yen will pressure the Carry trades and at that kind of leverage, pressure the market.

 The $AUD which is probably my favorite currency for leading signals bottomed first in a positive divergence and led the SPX higher, it was confirmed at the green arrow, but has since gone deeply negatively divergent with the SPX, this is one of the big red flags in the market.

As I showed, HY Corp. and Junk Credit that trade almost exactly the same, were showing 3C negative divergences yesterday, that seems to be showing up in price as Junk Credit falls this morning vs the SPX.

 For a new higher high in the Dow, the TICK chart is pretty mellow, it has been hovering around +600 and -750.

The TICK layout I created here shows the SPY with a negative TICK trend, you can see it on my custom TICK histogram at the bottom as well, there are a lot more signals, but I want to keep watch over the market, I'll post important developments as they arise.


Both ES and NQ are seeing intraday 1 min positive divergences now although they are not very big, so I'd expect an intraday move to the upside shortly.