Monday Morning Futures...

For all that happens over the weekend and the overnight session, it's amazing the market can zip to the upside overnight and then lose that with about a +3/-3 point for the ES high and low on either side of Friday's close, to open -1 point from Friday's close, it's as if no matter what happened last night and things did happen, there was a small up cycle being accumulated late Friday and price returned to just about where it left off to continue that task (that last bit is an assumption that we will have the answer to shortly after a.m. trade burns off), the point being, it is what was expected to continue and price thus far has put itself right where it needs to be to continue. This I believe is going to form the foundation of a new concept or understanding for us with regard to probabilities of opening prices after a weekend when a cycle (even a mini one) is in effect.

The assumption last week was the market itself was very weak which I pointed out last night with any money being spent in the accumulation stages, largely being spent in only the most influential parts of the markets, the Averages and the Industry groups which have the most directional pull on any given stock on any given day. The SEC itself estimates market direction accounts for two thirds of any given stocks direction on any given day with the second most influential force being Industry groups, so considering what this cycle is for (considering a confirmed Tweezer top is already in-confirmed Friday), it's little wonder there's so little attention paid to the rest of the market. Thus the assumption was that any engine influencing the market intraday to the upside will be Currency Carry Cross related of SPY Arbitrage or both.

It's too early to see if the 3 assets that are the basis of SPY arbitrage come together for a 3rd day as they did Thursday and Friday, but I suspect they will.

As for currency carry pairs, the Dollar is in shambles on the open this week, but the USD/JPY was never the assumed pair to drive the market (very short term), it was the EUR/JPY or more likely the AUD/JPY and futures have interesting confirmation information there as well.

I'll cover oil, which EXACTLY as the charts predicted, first saw upside and now have seen downside, but it was not a trade I was interested in because the charts predicted the highest probability was near term price chop with an overall bearish bias that should be the eventual outcome after the chop fails.

Lets look at the futures themselves as of the open.

 ES 1 min overnight since the Sunday open gained and a clear 1 min negative divergence set in to bring us back near the area where it closed Friday, this being important because I've always felt this was a concept of continuity during the tactical part (Accumulation or distribution) of a cycle.

 The 5 min charts still have a positive divergence, even more so than last night suggesting our analysis from late last week was spot on, still recall that it's not expected to look like much to most than noise unless we see proof that the accumulation zone is larger, then it might hit some limits/stops, but for now, it looks capped by the confirmed bearish reversal from Wed/Thurs./Fri. of last week, which also played out exactly as described in Thursday's video as soon as the first part of the formation occurred, the video predicted the bearish confirmation and what it would look like and Friday fulfilled out expectation with the daily candlestick's close.

 Yet ES and the other major Futures Indices are capped by larger negative divergences at 30/60 min which is a very serious threat to the market in the IMMEDIATE future.

 This is crude which 3C predicted would move up, but in to a zone of chop, it did move up and now down , continuing the expected zone of chop. I'm looking for  GOOD SET UP IN CRUDE ON THE SHORT SIDE AS THIS ZONE OF CHOPS LOOKS TO DRAW NEAR AN END.

 Gold has retraced a significant amount since the F_O_M_C rally, the 3C negative reversal at the top is clear, but the slowing of momentum with a slight positive forming is interesting as gold would likely move with ES (the market), yet it still looks like a counter trend correction to the upside that will resolve back toward the prevailing sub-intermediate downtrend, which will likely help gold accumulate more as a sub intermediate bullish trend grows a larger base.

 Silver lost nearly ALL of its post F_O_M_C parabolic gains, this is a concept I use often, "The Parabolic Move", I never trust them because they more often than not fail as quickly as they went up or down initially, thus traders chasing price have precious little warning to get out before they are already caught at a loss.

The 10 year Treasury futures (really the benchmark that sets nearly every other interest rate in the US from your credit card, to a car loan, a student loan, even a mortgage) look to be in consolidation at best, but note 3C in the flag or pennant area after the F_O_M_C rise, then look at the difference on theses 15 min charts on the 30 year T. Futures chart, something that has been going on for months.

While price in the 30 year futures looks not too dissimilar, the 3C chart does, (think about our TLT trade or possible trade-I have liked TLT, the 20+ year T-bond ETF  for sometime with little explanation beyond the charts) this is why I maintain my interest in the 20+ year longer dated treasuries as they have a distinct difference vs shorter dated or the benchmark 10 year.

I'm not ready to make any moves in TLT, as I said, I'd like to see a pullback to at least in the $102 (or less) area, although longer term it doesn't matter, of more importance to me is how to leverage up TLT without losing liquidity.

We're still right on track from expectations.