Opening Indications

Remember yesterday I said that seeing HYG (High Yield Corporate Credit) pumping in to the close to try to lift the SPY (which we had seen earlier in the week as well) was proof positive to me that the high liquidity asset was being used to try to lift the SPX?

Well here's how CapitalContext describes their SPY Arbitrage indicator and what is used to determine the model's value vs the VIX.

 the ‘SPY Arb’ model which identifies a tradable relationship between the stock market (SPY) and its value implied from interest rates (TLT), credit risk (HYG), and volatility (VXX).

Earlier in the week this was my hunch, after seeing market action yesterday I was sure of it, now that I have seen how the SPY arbitrage model is constructed,  have the proof.

 I just mentioned the strangeness in the Volatility (VIX) futures vs the market, the SPY Arbitrage shows the model at a +$.89 differential, this is indicating that according to the value of TLT, VXX and HYG (or any one of those or combination of them)  the SPY should be trading nearly a dollar higher, so my hunch that the VIX (Futures) were likely being used to try to mitigate some of the damage to the market seems to have proof right above.

CONTEXT for ES has a positive 3 point differential. There are many more assets that go in to this model, but it dos contain at least the 3 above in the SPY Arb.

Opening indications-remember this isn't even showing the longer term or more important charts with heavier money flow, these are short term, but the trend can be useful.

 VXX 1 min and the signals it has given for the market a day in advance, but it is still leading positive, protection is bid in a big way.

 Here's a negative divergence within the larger leading positive that sent the VXX lower this morning, sound familiar? In any case, it's better to fill the gap now.

 A close up of the same chart above looking at this morning's open.

SPY

 The SPY 1 min was leading negative yesterday afternoon, the EOD accumulation to try to push the SPY/SPX higher didn't amount to much, however strangely in the intraday timeframe it landed the SPY almost exactly in confirmation, at the trend view level the SPY has more downside to go with the divergence still leading negative.

 And the leading negative divergence in the trend of the 2 min chart, note all the highs that went negative, but worse is yesterday's move leading negative as well as today's price position.

Sometimes people get so caught up in intraday trade, they feel like or write, "Why is this market so bullish", when all you have to do is step back a little bit and it's clearly not bullish/

 This is a series of lower highs and lows in the SPY, how can that possibly be called bullish, especially when taken in context of all of the analysis, flights to safety, manipulation failing, selling at extreme levels...

This upside channel buster tends to end with a volatile, fast move down through the bottom of the channel.

 IWM 2 min trend, there are many charts that are much more important that look a lot worse, but I'm trying to stick to intraday trade.

 The negative divergences at every high and leading negative yesterday and today.

 IWM 2 min close-up looks as if it's possible for an intraday positive divergence, by the time I get this posted it will have changed. **A Quick updated look shows 3C still moving down toward price.

 QQQ 2 min trend with a brief, but strong leading positive divergence that as sold in to pretty quickly, another one on Tuesday at the lows and yesterday is in leading negative position as is today.


The close up of the same chart intraday failing at yesterday's closing trade and again at this morning's 10 a.m. highs if you can call them that.

I think the most fascinating thing though was how I was correct (sorry there's not a good way to say that without sounding arrogant, believe me I am humble before the market) in seeing that HYG which already has shown massive distribution and HY Credit which also has already shown massive distribution and flight, were used to try to goose the market higher, this was from observation day after day and I've just had it confirmed.