Opening Futures

I never want to be too quick to judge the market based on overnight futures activity as the volume is low, it's an easy market to push around, however last night didn't do anything to help futures according to 3C data.

Last week the pullback was pretty much a certainty, the only question was how deep and whether it would be a constructive pullback (accumulated), I'm afraid we won't know the answer to either of those questions immediately, but we should know before they turn so in plenty of time for it to matter.

As always, regular hours trade is far more important, but with banks closed for Columbus day, don't be surprised to see some unusual volatility even for this stage of the market.


Based on the 15 min Index futures, I don't want to be too quick to judge this market, nor too quick to close VXX calls.

 ES is now leading negative from overnight on a 15 min chart rather than just 5 min charts.

NQ-NASDAQ 100 Futures are the same

TF- R2K Futures don't look as bad, but I have a feeling it's just relative.

I posted the following chart in Friday's EOD Wrap with the following comments...

"Option "A" is what we already have and that's a "V" reversal, besides being rare, they also are a reversal "event" rather than the much more common reversal "process". The reversal process offers a larger footprint which can support a stronger reversal (up) move and that is because the market has a chance to accumulate a larger position that offers more support.

Option "B" is a pullback, although not that deep, however it is just about what CONTEXT is calling for right now which is VERY interesting.

Option "C" would fill the gap and offer a much more stable base from which to rally from, it would most likely be a constructive pullback which would also offer us some higher quality short term trades. Finally it would give us a better set up for core short positions and this is the most important reason for a bounce/rally at this stage in the market, in fact in my view, for Wall St. it is the only reason."

Thus far we've hit an opening low of $169, so I think option "C" is still plausible and if it was constructive, would offer the most stable opportunity for new trade/positions.

As for Gold, last night I said I thought both gold and silver (gold a bit more) would be doing well, but in my view they both need a pullback as their current base does not look sustainable... These are the Gold and Silver 3C 15 min Futures...

Gold, the divergence has even started to fade, I don't think that is bad because the base here is a sharp "V", it's not stable so I'll be watching for opportunities on a more stable base.

 The same is true of Silver.

What is clear is that the lack of US data due to the government shutdown has sent the market looking to China for signs of economic health and China has disappointed with a big ,miss in Imports and electricity consumption down significantly, especially among industry.

The point being, gold and silver are the flight to safety trades, but if or as they pullback, it looks like Treasury futures are suggesting they will be the temporary rotation to safety while gold and silver pullback...

30 year Treasyry futures are rather flat, they are perfect for a rotation to safety while gold and silver get their base together, this is an early opportunity we should be watching for.

Oil/Crude, looks good to me, I already have a position there, I'll watch it for new entries.

15 min Crude has a large enough base, a pullback to the $100 area would make it even more attractive.

Lets see what regular hours trade has to say...