Daily Wrap

This will be pretty quick. The SPX makes a new all-time high on some of the most dismal volume you can imagine and a 0.15% gain with no support from the Russell closing in the red and the Dow and NDX both closing up 0.01% which is just ridiculous, I'd venture to say, "Don't look for a follow through day tomorrow.

All of the averages closed with bearish reversal dojis and as mentioned, tiny volume.

I said Friday I'd think today would be a 3rd day of noise within the trend as it was and that likely by Tuesday we'd start to see some downside action, I think I'll stick by that, the wild card I think is whether the PBoC conducts their Tuesday reverse repo overnight, I'm betting they don't, at least not until they hear what the F_O_M_C has to say Wednesday.

Sentiment took a sharp downturn in both indicators around noon time so that's indicative of a leading indication lower, Commodities fell on the open, but worse through the day. As a matter of fact, I think commodities are a good proxy for what a lot of indicators look like.

They were in line with the SPX the last 2-days and today just fell out of bed, many leading indicators or 3C charts like credit, VIX futures, etc. all have the same traits to different degrees.

As for currencies, the $AUD may flip flop around a bit, but I'm going to say trend wise, it has more downside to go and probably fairly significant (short FXA to play that trend). The Euro seems to be topping right in the $1.38 area, since the EUR/JPY has been leading the market I suspect this won't be helpful in supporting the market.

 EUR/JPY in green/red candlesticks vs ES on a 5 min chart, the FX pair has been leading as a risk on carry trade.

Today the FX pair fell short and the SPX ramped just enough to make a new closing high, but well off intraday highs and there's no FX support under ES futures right now.

I can't get a long enough look back at the Yen, but longer term it has a base and a breakout level around $10.60, I think when this happens, the entire market structure collapses on record margin and all, the downside is just impossible to forecast as its like the perfect storm with HFT liquidity disappearing, record levels of margin, and a globally sick economy, we have no model to compare this too except 2008 and I think it's fair to say the F_E_D has blown a bubble that will make 2008 look tame.

Finally the $USD has a small base it's been building since last Tuesday, it put in some upside today and even though it should jiggle around like everything else as there are few straight lines, I'd say the base is large enough to support a larger $USDX move higher.

Gold which I like a lot longer term is definitely in the zone for a pullback, that should make for a nice new trade entry after a pullback with confirmed accumulation. Silver's longer trend looks the same as Gold's, but in the near term it's harder to read, I suspect it will act similar and gold miners should hitch along for the ride with gold.

Finally I think we'll see that TBT long pay off very soon and then we can look at a TLT long...

 TLT's larger 60 min base is very supportive for much higher prices, but...

near term intraday charts all look like a pullback is in the cards which is good as I'd like it around $100 or so and the TBT long will move up on a TLT pullback.

That's it for now, I'll check futures later tonight, but I don't expect any big surprises, remember the F_O_M_C 2-day meeting starts tomorrow.