Gapping Up...

The "reasons" given for last night's move up in the SPX futures were supposedly a "rumor" which is the same rumor that has been floating for days, that the PBoC was going to inject liquidity in to their system, then the market momentum algos took over, the PBoC came out and denied the rumor saying liquidity was ample, but momentum already started and it kept going.

To me, this is the CNBC explanation, after the fact, grasping at anything that seems to fit because they don't have an understanding of how underlying flows work.

If this PBOC rumor was enough to move the markets overnight to gap the SPX up, why didn't it do so when it first appeared (I believe late last week)? Simply because the process was not complete. I said before the market even opened that the process should be over early this week, maybe as early as Monday afternoon, now that process seems to be over. I said on Saturday in the email I posted yesterday before last night's ramp that the normal catalysts would apply, but to expect F_E_D rumors to float to help start the market, we got even better, the two biggest F_E_D hawks were both out yesterday sounding like doves, no rumors, no Hilsenrath, straight from the hawk's mouth.

It just really bothers me when people give simpleton answers to a complex market, it doesn't do any of us any good.

In any case, we should gap up, we talked about this process last night in the Index futures, stocks, the $USD, credit, etc and expected it, here it is, do we really need to resort to recycled rumors that had no effect the first time to explain the markets?



ES 1 min..

 ES accumulating before the European open...

ES as of right now, it looks good, but I expect the normal a.m. volatility.

We have a rather heavy economic calendar today, that hasn't seemed to have any effect so far, so this is about something more than knee jerk reactions to rumors and economic data.

ES has now caught up to the 5 min chart as explained last night (as well as other Index futures).

The $USD looks like it will have an early pullback effect on the market, but the 5 min chart is worse so that effect that is on the 1 min USD chart is capped and likely for the open.

The 15 min chart I mentioned as likely to see more damage (USD) has overnight, so you can trust things that we saw and showed you days ago that are coming to pass as we expected based on objective analysis or you can believe in after the fact ,recycled rumors.

It really does matter as to whether you want to be kept in the herd or break free from the heard, think for yourself and understand the market (before it happens). It also goes to the issue of having objective data ahead of time you can trust rather than after the fact recycled rumors that do you no good at all.

Have a great day, it should be interesting as usual, but it is doing exactly what we expected based on objective signals and at the time we expected, even the catalyst we expected came true on the first day better than we expected.