First was the consistiency of signals yesterday, even Dominant P/V trend alone suggested a move higher today, in fact based on yesterday's Dominant Price/Volume relationship, I would have said the market will more than likely make a move higher today, add everything else and it was just very hard to imagine it not making that move.
However the other side of the coin was those same signals that were so consistent in all these assets and indicators, were just as consistently weak and at last look,they flipped already (I have to check the closing prints, but I updated earlier for leading indicators and all had already flipped to a level almost as consistent as yesterday in which I'd say, Monday we'll be down (I still have a lot to look at, but that's how severe or short lived those bounce signals were.
As I always remind on a Friday or the day before and warned this morning at 11 a.m....
"usually around 2-3 p.m. most contracts are closed and the market starts to act whichever way it wants in to the close.
I've found that the price action during this time has little relevance on the next week's open, but the 3C signals often pick up the next trading day right where they left off on Friday or the day before."
I'm updating and getting ready to look at all of these signals closing prints, however there's nothing really obvious standing out like that middle of the night smack down in the Yen on no volume and no news that sent futures higher, blatant manipulation.
I did see several things that contributed, one was a short squeeze, one was a VIX slap down, but 2 of the more interesting things were
1) The Russell 2000 which generally leads a move up, DID NOT participate at all in that closing ramp and
2) Even though stocks did make it through the NFP print after an initial upchucking, the QE sensitive assets DID not, Gold traded down, treasuries traded down and the USD traded up.
IT WAS LIKE AFTER THE NFP, STOCKS DID WHAT THEY WERE ALREADY SET TO DO THE DAY BEFORE, BUT THE QE-SENSITIVE ASSETS DID THE EXACT OPPOSITE AND REACTED THE WAY YOU'D NORMALLY EXPECT THE MARKET TO REACT, THEY ACTED AS IF THEY TAPER IS ON, WHILE STOCKS ACTED AS IF THE TAPER IS OFF, THIS WAS VERY INTERESTING.
I didn't have any idea as to how high this move up would go or last except that the signs were all short term (that's why I called it a mini-cycle) and as mentioned, the assets that pointed to it were also very weak.
I'll update later after looking around, but the move after 2 pm is not very surprising, even the fact the market moved up at all after the NFP is not surprising because Wall St. rarely abandons a cycle they set up. To me, the price move is interesting, but not much more than a curiosity, it's the 3C signals and the other assets (like leading indicators that count, THEY ARE THE ONES THAT TOLD US THIS WAS COMING AND I'D BET 80% OF TRADES EXPECTED ANOTHER DOWN SAY TODAY.
So, it's important to keep an eye on what's important and to put that which is emotionally moving in it's place and perspective because this didn't look like any solid risk move, it looked like market emotional terrorism and I'm sure many of you can feel it, that's what it's designed to do.
Have a great weekend, I'll post more soon!
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