AUD/JPY vs ES / Market Update

Earlier this morning I posted the Currency cross that I thought was responsible for ramping the market overnight, the AUD/JPY and I also posted a chart of the pair showing it looked like it was running out of steam, I didn't do a direct comparison vs ES, just eyeballed it.

I think you'll find this interesting as to what really moves the market, it's stuff you generally won't hear on CNBC.

 This is a comparison of the AUD/JPY (green/red candlesticks) vs ES (purple line) overnight, as far as the carry pair that ramped the market overnight,  I'd say we can put that one to bed. Note that ES has broken away or AUD/JPY has broken away from ES.

These divergences may be a little hard to interpret as the FX ones generally are, but a negative around 3 a.m. (European open) sending the FX pair down in to a large positive divergence that ran the pair up to a new high with ES and then it went negative at its high for the week right around 9:30 a.m.

Note ES shows good confirmation on the intraday 1 min as I mentioned in the first post today just before the open and now as the FX pair has fallen out of sync with ES, 3C has also fallen out of sync at the exact same spot.

Again, I think this is just more confirmation of yesterday's analysis and a finer point was put on it last night as to what we'd be looking for...

This is from last night's post linked above, specifically 4 timeframes of the SPY and what I thought they were telling us, what we'd be looking for today...

SPY 1 min

"That 1 min positive divergence should be enough to take the market higher, specifically I'm thinking about the IWM triangle as the IWM is the average everyone is focussed on and that triangle was no coincidence."

SPY 3 min

" I think it's fairly safe to assume that any upside move is going to be a head-fake, false breakout which gives us excellent positioning not just on market averages, but a whole range of assets"

SPY 5 min

"...this leaves me pretty certain any breakout move is a false breakout, but we could have guessed that by market behavior. mass psychology and price action in the IWM alone (triangle intraday...pretty obvious what that's meant for)."

SPY 15 min

"The 15 min chart is already rotten as the Index futures confirm so I also feel very certain that this is the leg down that was first picked up about a week and a half ago.

*Note the head fake move in yellow, people usually don't notice them unless they are pointed out, but the entire point of them is to set up a reversal and that's why they tend to be the last thing we see before a reversal just like the example above."

I'm going through the watchlist I was putting together yesterday, GOOG hit one of my targets from yesterday's post, on the open, I didn't catch that and probably would have waited as I too like confirmation, but it's 3C chart confirmation generally well ahead of price.

The "Reversal Process" (rather than reversal "event") still applies, you can probably take a look at the charts and get a rough feel for timing, they tend to be proportionate and have symmetry. During this time I'll still be watching for additional confirmation as well as opportunities.