Looking at the futures, I'm pretty uninspired, there's not a lot going on, much like this week in US Macro-economic data, compared to last week, it's a fairly light week for any important macro data generally speaking.
Probably the most influential events immediately will be Syria-based including the Senate starting their debate on the Syrian situation tomorrow (Monday).
One other interesting note that may cause that one thing the market REALLY doesn't like, "Uncertainty", is the possibility of Syria becoming a protracted engagement, I think that's a given just by involving Congress, I must say this is one of the most surreal "strike" engagements I have seen, a full scale "Boots on the ground" war would merit thge utter chaos that is Congress, but a limited 2-day strike with Tomahawk missiles, not even a jet aircraft overhead, seems to be more than meets the eye here. What is the point of telegraphing a limited, already largely ineffective as even the President initially said he wasn't trying to reshape the battlefield with the strike, but to more or less tell Assad that he did a bad thing. So while Congress debates on and on, anything of high value as a target has already been moved in to residential areas, next to hospitals and schools and yes, there are still targets like runways that can't be moved, but it's just an odd situation that wreaks of "More than meets the eye". I have my own opinions, but they are of no consequence.
I digress, the point was, as Bloomberg published... a protracted engagement may very well delay the replacement for the new F_E_D chairman and Uncle Bennie may indeed stay on longer than he was suppose to, which may give the market a dose of uncertainty, to what effect? I have no idea, but I don't think it's anything that's of immediate concern.
As far as assets that opened Sunday night in the futures market, there's not a lot going on, the $AUD did gap up, but it saw a 3C negative divegrence in to that gap and has been losing ground since, now below Friday's close. The $USD is just about flat, the Euro is just about flat, but the USD/JPY and EUR/JPY as well as AUD/JPY are all up on the open, can you guess why?
Simple, if the first currency of the pair is flat and yet the pair is up, the Yen gapped down.
The 5 min Yen chart also looks like it will regain ground so the chances of any of the former Carry crosses driving the market higher seem quite low.
The only other future that gapped up was the Nikkei 225...
Crude is vacillating a bit, but nothing too interesting there considering Syria.
Precious metals (remember a GDX call/long was added to Friday) are relatively flat right now, there was some initial volatility in silver, but we're pretty close to unchanged there.
In short, there's not much going on thus far and nothing going on that would change my view on our analysis as summed up Friday with the EOD post which I look to to see the probabilities of the regular market action based on late day divergences as the tend to pick up right where they left off on the next trading day, even over a weekend.
From Friday's EOD Post...
"As far as the direction of 3C as it almost always picks up where it left off on the next trading day, even over weekends, there's every reason to believe now that we are through options-expiration market pinning, that we can move lower.
The charts suggest we will see downside come Monday and I have little doubt it will be the move to the lower end of the range.
The longer charts are important for longer trends, but as far as what we expect to see starting early in the week (Monday), it's downside so hopefully our VXX calls do well."
I have no reason to doubt that at all. Gold has recently been acting as a flight to safety trade and while gold miners are not gold, the add-to position Friday does suggest that PM's, more specifically gold may be ready for an upside move early in the week meaning the market should be in a risk off mode if the flight to safety trade in gold is activated.
And the broader 60 min chart (30 min is sharply positive as well) looks like it's ready to test some upside after a recent negative divergence and decline.
JPM interesting, late Friday took off their Recommendation to "Sell Gold" as they needed to replenish their warehouse which was an issue as it was running low in one of the world's largest if not largest gold vaults, interestingly very close to the NY F_E_D's and apparently there's suppose to be a tunnel linking the two. So JPM picked up gold on the cheap and now have taken off their "Sell gold" rec'd and are tactically long commodities, base metals, etc which probably means they'll be looking to sell.
I'm not crazy about trades for a pullback within the chop range, there are a few open and a few that look decent, but the high probability trade would be at the bottom of the range, that would be a larger swing trade worth taking more risk on, so long as 3C confirms accumulation in to any market pullback. Then of course as we pop to the upside on a much larger move, we'd be looking to sell short in to that as the primary bull market since the 2009 lows according to all indications (and we are no Jonny-come latelies on the subject) might look something like this...
I look forward to this week, I think we have some positions in place that should do well for what they are, but the larger swing+ positions that are worth taking a little more risk on should set up and we'll have confirmation of that before taking any action. Ultimately that's just a means to a much larger end, that's where things get really exciting, but for now we take it one day at a time, PATIENCE RIGHT NOW IS A FANTASTIC IDEA, there's a time to hold'em, fold'em walk away and run.
The traders I see get hurt the worst are the ones who think they can make things happen, the ones I see doing the best are the ones who wait patiently for the set-up (which very few people will see when it really matters-that's called an edge) and don't try to force the trade, the market is the ultimate arbitrator, we are here to listen to what it is telling us or what we can pull out of what it doesn't want us to know, thinking you can "make " it happen is dangerous, you may get lucky, but that just reinforces a unfounded belief and makes it that much more dangerous.
Lets have a great week ahead!
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