Market Update

I don't find anything particularly interesting about early trade thus far, the charts as of yesterday and starting the day before were suggesting a near term pullback, the first reason for that could be an options expiration (weekly) pin in which max-pain is lower than the market was/is, thus the market needs to adjust to that to make the pin effective. The second reasons could simply be a correction that lasts a little beyond today, we should get some hints today as to which.

The early trade has been congested, but as I posted earlier, the 1 min charts were sharing small relative positives and moving toward gap fills whereas the 3 min charts were more in line with recent analysis suggesting some drawdown in the market.

For the most part, everything I've seen early on fits with all of the above. First the market congestion this morning...

SPY 

 The yellow box is where today's trade started, not much of a trend, just congested.

ES (SPX futures) have been congested also this morning...

ES since the open at 9:30 (white arrow), there's not much of a clear trend in price or 3C intraday.

The NYSE intraday TICK chart (all NYSE stocks advancing per bar less all NYSE stocks declining for the same bar) shows us a choppy market with a little direction, but no conviction as the TICK hasn't broke above the very mediocre reading of +750, so there's no strong underlying movement in stocks, just as the congested market would suggest.

The CONTEXT Model for ES suggests the analysis of somewhat longer (meaning longer than intraday, perhaps today's op-ex close or even a few days) term downdraft, while the SPY arbitrage (intraday shows the very early manipulation of the market (presumably to try to fill the gaps) and worsening trade since, HYG was clearly the lever used to effect early upside manipulation (or at least to halt the pace of decline).

 CONTEXT for ES, as mentioned last night saw ES come off the highs of the week yesterday afternoon and revert toward the model with only a -4 point differential last night as opposed to about a 25 point negative differential before that. Interestingly, Es has come down about 12 points-still about 13 points shy of the model, but has just about an 11 point negative differential right now which is growing- that's pretty close to "reversion to the model".

SPY arbitrage earlier this morning shows manipulation being used to help the market (green histogram), that is fading.

The obvious asset used which is 1 of 3 that makes up the model is HYG - High Yield Corp. Credit.

Note HYG's positive relative performance vs the SPX this morning?

So far there's not much of interest that is conflicting with our analysis. I would expect some volatility today as shifting option contracts being closed, exercised or even opened, change the area of max pain throughout the day. What we are interested in is whether there's any significant underlying change in tone, thus far, nothing.