A New Day and New Type of Fence Sitting

Imagine you are the market, one sentient being rather than the tri-polar masquerade that is millions of different voices all screaming in one's head at the same time (the market as it is). Yesterday you're sitting on the fence and leaning toward jumping DOWN.

Watching the futures for a second night and morning, there's a different feel, not one so much of useless information, but one of a very tight correlation of "sitting on the fence" purposefully, but today you could say it looks better or perhaps it's just better to leave, "Better" out and say, "It doesn't look as bad".

As we saw Tuesday and Wednesday and this is why I chose not to hit the panic button yesterday as mentioned in a late day post, "A day a trend does not make". However,  this can change in a matter of a few hours so I wouldn't grow attached to it, but for a feeling of what I'm talking about, look at the Index Futures.

 This is a 1 min overnight chart of ES (SPX futures), there are two divergences, but I don't remember any recent overnight charts that were this tight with price.

The same goes for NQ (NASDAQ 100 Futures), there's almost no divergences, almost perfect confirmation...almost

However if yesterday had a distinct negative feel which it did, today has a slightly more confident feel.

 To the left the 5 min ES (SPX Futures) shows 3C lagging and the negative feel, in white it is at least in line and slightly leading, this does matter because the IWM is so close to a breakout event that can reshape short term trade, looking back historically, it would be an unremarkable moment on a chart, but in the here and now it would be one of the most important moments, probably the second most important for the overall market for the foreseeable near future.

We shall know with greater certainty shortly as regular hours volume should confirm or deny.

 Note the positive at the left in the benchmark 10 year Treasury and the in line status that confirms what I'm saying about the Index Futures above.

Crude as I have been predicting, but missed the bottom, is still telegraphing strength for a move higher, hopefully we can get involved. I'd guess this is a discounting of fears of a lower dollar due to the Debt Ceiling, but I think it's a transitory rally that fades to a decline.

Strangely for a market that is very scared of US debt default on the failure to secure a Debt Ceiling deal in time before the first interest payment comes due after the Treasury runs out of money in only a few short weeks at best, the $USD has an odd positive divegrence.

While the 1 month Treasuries are hitting near 5 year highs on the fear that Congress won't tackle the Debt Ceiling (this is a higher rate than that of the 2011 Debt Ceiling), the $USD seems to be telegraphing that the fear may not be as real as the much watched 1 month treasuries suggest.

This is a 60 min USD chart.