I don't know if this is enough, but even if it's not, it shows a willingness to take on risk and to back of protection from downside market moves, something I've seen the last 2-days in VXX performance vs the SPX correlation so that says something alone.
The FX carry driver may or may not be found, we are in a different stage of the market now, everything we've been looking at the last several months may no longer apply, there may be no carry trade left, the Treasury/market relationship has certainly changed; so we just need to be extra perceptive if we are going to grow and get this right.
Last night there were a few "odd-ball" signals that included sentiment getting stronger in to the close, the $USD staying fairly flat despite some other currencies getting hammered, seeing commodities flash a positive divergence or dislocation with the SPX, XLF and even XLK performing better through the afternoon and in to the close, all of the averages except the Q's ending on a solid closing note in intraday trade, and it continues. Here's what I have so far.
VXX showing 3 stages , 1) accumulation 2) the kind of accumulation seen right before a move higher, often market makers/specialists, 3) a total failure to lead or even stay in line suggesting weakness or softness in the urgency to grab protection which is odd in a market like this with 9 of the last 11 SPX days down.
UVXY 3 min leading negative, like VXX in intraday timeframes.
VXX 1 min leading negative, this is actually
a bullish market signal developing.
The actual VIX Futures - 15 min show a relative negative divergence, they are stuck and also not seeing the demand like VXX which is based off the front two months of VIX futures.
Intraday 1 min the VIX futures are looking a bit worse, remember the earliest divergences (timeframe) will hit first and have the most detail.
HYG, while this 5 min relative positive is not something I'd put in a textbook, it is a relative positive nonetheless.
This seems to express a willingness for smart money to take on "some" risk, like I'd take on "some longs/calls" for a bounce.
HYG 3 min looks a lot more impressive, it used yesterday;s weakness to accumulate shares.
The HYG 1 min shows the same.
TLT doesn't work with the SPY Arbitrage as it would need to move down like VXX, but the correlation between the SPX and TLT has been out of whack for well over a week now.
We also have Junk Credit performing better on the day as well as High Yield.
We have good strength in the a.m. and then it backs off, but I read this as being no different than a divergence, it days to me the SPY will pullback toward the a.m. lows and create a larger base and give the Q's and IWM some time to catch up.
Any one who wants to hitch-hike a ride on a bounce, I'll be putting out high probability positions as I find them, for everyone else, I'd be patient and remember the big picture, use price strength to short in to because the long term (which really means the highest trend probability) charts are VERY broken.
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