As suspected, AAPL is down from a bear market counter trend rally, I think it has a jiggle left in it (bounce), but I suspect the bear trend will re-assert itself so I'd like to add to the AAPL equity short on any price strength.
Gold and especially silver crossed below some stop out levels today so over the coming days I think it's likely to see a base form and an upside move, I have more respect for the SLV/AGQ long, Gold I believe will continue in its bear market trend, but both can make for decent bounces and SLV probably for a longer term trending position.
The USD as I mentioned last week as it was pulling out of its pullback is now making new intraday highs-we saw new closing highs yesterday- which were the highest since July of 2012, again I encourage you to read the linked "Currency Crisis" posts where the $USD making a new high and a much larger move up was predicted well over a month ago and the Yen, as we found out today, would be a major contributor to market action-I just didn't realize to what extent-intraday even! Even tonight the Yen and ES are playing mirror roles just as we saw intraday today and yesterday and checking back, even further, the Yen isn't the only influence, but its far greater than anyone imagined, at least for now.
From my extensive Yen analysis tonight, it's my belief that the Yen is on the second half, the upward half, of a rounding base that will take it much higher. From the correlation VERY clear today (whether BOJ asset purchase related or some carry trade-doubtful), this is a clear market negative, here's an example of the chart, a head fake move at this area is always a possibility, but I suspect not as high as with equities.
All index futures have current negative divergences right now and the Yen correlation continues even in overnight trade, for example...
If it were this chart alone, I'd dismiss it to, but after this and this with several days and small intraday moves as well as macro moves proven, is it still so easy to dismiss? This is why "3C" is named as such, a reminder to "COMPARE, COMPARE, COMPARE".
Have you seen anyone else in the entire market or on any of the financial shows prove this high correlation? It's only by looking everywhere, where people don't think to look do we find our edge and now we have perhaps one of the sharpest edges in the market for as long as it lasts.
I'd remind you, you'd do well to remember this morning's European and US economic data, soon these reports are going to matter more and more and not in a good way as bad news use to be good news as it kept QE flowing. As a result, we'll be keeping closer tabs on the economic situation worldwide.
to ready our next edge coming in to play sooner rather than later.
Spot VIX was interestingly higher today considering the market. For the most part VIX futures were mostly in line on the 3C charts, but interestingly as you get to the more important timeframes, there was substantial accumulation in to the afternoon, the trend is already hugely leading positive.
While TLT showed early strength that quickly faded, I believe it was intentional to run stops as it showed remarkable resiliency on the intraday 3C charts...
If you are unsure of that message, look and listen a bit closer, where price moves is important, but whether price is supported, in line or being sold is the real message, confirming the safety trades above, take a look at the risk trade in the SPY...
We can't be all one sided, we have to look at the evidence and find the truth, not just assume everything is manipulation, today we know it was the Yen correlation, a new one replacing the Euro and AUD and most surprising, except I wrote about it for 10 hours over a month ago.
Even SPY arbitrage bears out the EOD "Ramp" wasn't so much a manipulated ramp as pure chance catching a jiggle in the Yen at the right time.
With AAPL down over 8% over the last 3 days, I believe our short there will bear fruit, but first I'm looking for a bounce-that will likely be a put position and an add to on the equity short as the bear continues.
The bigger picture represented by the core equity short should be quite clear below, there's a lot of opportunity ahead...
AAPL weekly 3C chart.
As for my claims that risk is being sold and safety piled in to, credit alone makes this clear and it's one of our best leading indicators as, "Credit leads, stocks follow"...
ES in blue, HYG in green, HY in red and IG in brown, a pretty clear dislocation, not to say HYG can't bounce, it has the gas in the tank, the question I'm fond of answering is whether it is sold again immediately upon thee hint of any strength as seen this week already.
JUNK credit, also HY and an apparent choice for a risk on posture wanted nothing to do with the market's move, a rare posture for institutional traders way to express a risk on sentiment.
And HY Credit...
Not biting either, people don't give credit enough credit, it has confirmed several profitable tops and surprising bottoms for us with 3C.
That's it for tonight, the Yen was an exciting discovery today- at least to the degree it is moving even intraday trade, we'll be looking at a lot more Yen 3C charts, if we know what the Yen will do before price does it, we have an even further head start on the market.
No comments:
Post a Comment