Post Close

Well not only did we not get the afternoon ramp the market has become notorious for, but the R2K barely closed in the green (which is significant because the Russell 2000 is usually the leader of risk on moves). The R2K closed green by 0.05%, a hair. The Q's weren't much better and even the SPX was 0.16%.

TLT, which had an intraday negative from 1 to 3 minutes would probably be the first time that we didn't see a pullback-correction of some significance. Typically if the 1 min is negative we have a 50/50 chance of a pullback (through price) or a consolidation (through time), but as soon as the 2 min chart joins the 1 min chart in the same divergence, it almost guarantees a pullback, we also had the 3 min chart (all intraday timeframes) and all with handsome negative divergences, they weren't ambiguous.

So TLT was not only not used as an arbitrage asset to hold up or ramp the market in to the close (which may have been the intention with the 3 intraday negative divergences), the very slight pullback TLT did see this afternoon was accumulated as I showed you and then driven higher.

My guess is that TLT was being set up as an arbitrage play to support the market in to the close and buyers seeking the protection of Treasuries stepped in and overwhelmed the manipulation with real fear, real demand for safety.

TLT's negative divergence this afternoon with a tiny pullback and then accumulated and pushed higher.

This is another example of risk being sold and safety being bought. If you just came home from work and looked at the market, you might notice it here and there, but most people are looking at price only, however when you watch the market all day, everyday, you can see these trends in what is being bought and what is being sold and this has been VERY obvious for weeks now in addition to the damage that was already done-this was a new front that has been consistent.

Although VXX was initially flipped in the a.m. to support the market...

 (VXX=green vs SPY=red) Not only was VXX flipped as you can see it's early move lower supported the SPY, VXX righted itself and headed higher breaking the natural correlation with the SPY as it moved higher as the SPY was as well.

Above you can see the intraday negative divergence on VXX's open that was used to knock it down early, but it wasn't going to be held down and went straight back up-that's pure demand and demand out of fear. We haven't seen any pure demand in risk assets except Friday's triangle breakout, these are amateur observations, the fact the majority of retail misses this is a disgrace.

I'd like to ask them collectively, "If there's demand for the market/SPY, etc, why then is VXX and TLT moving up against their correlations?" You don't even need 3C to see this! 

Why haven't they noticed the support in VXX (VIX Futures) which should be making new lows, forget the huge 30 min 3C leading divergence, you can look at price alone and see for probably the first time in years how Technical Analysis "USE" to work, that's real support caused by real demand, not some Wall St. Parlor trick.

The only asset that could be used on an arbitrage basis to hold up the market in to the close was HYG and it was used, but right near the close, whoever was holding it was quick to get out.

 HYG intraday at the close-distribution...

Multi-day distribution in HYG.

I guess what I find more interesting at this point as I have seen this behavior building stronger over weeks is what happened in to and right after the close in Index Futures.

 ES intraday today with the open in green below and close in red.

NQ right after the close (white trendline).