Daily Wrap

Today's a little more straight forward than you might think, if there were nothing going on in the middle east, today would be a much harder day to analyze, but as I said in my first post of the day, stocks were lower, precious metals and oil were higher and that was over a flurry of Reuters headlines that the US may attack Syria at any moment. The market built in risk premium because the market hates uncertainty, but it seems some of that uncertainty was taken out with "No boots on the ground", likely not going to be a no fly-zone, it's not a regime toppling attack, but a limited, likely 2-day strike, etc. Still, like they say, until the missiles fly...


It's not as if today's market bothered me because many of our core positions are set, I just feel there are still some short term gains to be had and some other shorts to be set up, but the Core equity only tracking portfolio did fantastic today.


Weekly Rank, Percentage Gain vs the SPX

Monthly Rank, percentage gain vs the SPX

I didn't want to jump to any conclusions based on price alone this morning and so far I'm glad we didn't, this can provide a great opportunity, but we still need a little more time for this to mature and harden or fall apart, a lot of good moves were made today, but like I said, "I wish we had a few more hours today".

I'm not going to cover every asset today as many I did throughout the day and honestly we may have a similar move overnight, it's still the data during the day that gives us the most information on probabilities and perhaps some fantastic trades.

Retail is as bearish as they can get, they're following price only and I'm not sure if they even know what the catalysts are that they are following.

Professional sentiment looked a lot different than retail today.

HIO vs the SPX.

I also saw some charts of someone who tracks dark pool accumulation that looked very similar to ours today.

As I showed earlier, Yields and the SPX reverted back to the short term mean so there's no tension on the market in that respect.

One of the more impressive closing charts was the skittish High Yield Credit...

That's a VERY bullish move today.

HYG didn't make a similar price move, but HY credit's price isn't part of an arbitrage scheme, however HYG did produce this today.

HYG's divergences yesterday and today, it still needs to solidify on 5 min charts, but that happened in other assets very quickly today.

I suspected VIX Futures were either going to see 3C grow or give out, the 5 min chart answered that today...

They seem to be giving out, the market moves opposite the VIX futures, remember yesterday we had a quick VXX long based on a 1 min positive, this is a 5 min negative, but not quite where I'd like it to be.

The charts made up quite a bit of ground, but as I said, they still need at least several hours to solidify positive divergences and to create the reversal process, I suspect if we do get one as I believe,, it will be sharper than normal.

Some samples...

 DIA 3 m

 DIA 5 min

IWM 5 m

SPY 3m

QQQ 2m

QQQ 5m

I'd be satisfied with strong 5 min leading , but I'd prefer to see longer timeframes.

As far as the partial SLV Put today, I often find that leveraged ETFs of the underlying move first, AGQ grabbed my attention.

 AGQ 3 min

AGQ 10 min

Then I found SLV looked very similar despite being a totally different ETF/

SLV 3 min

SLV 10 min.

Basically I could go on, but that's all that's really important up to this point, sentiment and credit were two biggies today, otherwise it's just letting those divergences harden, if we get that tomorrow, there are dozens of quick options or leveraged ETF trades that would be fantastic.

I'll check back in if futures start to look interesting.