First though a quick rundown of the week so far. Index futures opened the week last night on a mini tear right out of the gate and then stalled, although BOJ officials were jawboning around then it seemed like the Yen was knocked down twice right as it was clear Index futures had lost momentum and stalled. The Yen getting knocked down did its job and lifted EUR/JPY, but EUR/JPY didn't do its job in lifting Index futures and they drifted laterally to slightly down the rest of the night in to the open.
While there's some debate about what caused the late day weakness in which the COMPQX lost $4000
Besides, gold had already been moving by the time this happened.
Something definitely upset the market as it was noticeable in numerous areas, take the NASDAQ's pump prince, AAPL...
However, should we be all that surprised (other than the NAZ Comp missing $k again when it was a fraction of a percent away from the close) considering earlier market updates were already showing trouble.
An hour and a half earlier we were already posting signs of trouble in the market averages (all of them), VIX futures (and VXX/UVXY ) as well a some currencies in "Market Update"
Then about 50 minutes earlier, again more signs of trouble we posted in Leading Indicators including HY Credit, Sentiment, yields and VIX. In fact by that point, I had seen enough and ended this post with,
"I'm going to look at some trades/management."
After that I posted a reiteration of VIX/UVXY long, GLD/GDX/NUGT long, MCP, etc. Something broke in EUR/JPY, but about 10 mins. later, although it had been hitting intraday resistance.
TWO THINGS I FOUND INTERESTING, 1 WAS THE SIGNALS WE ALREADY HAD IN FUTURES, THE AVERAGES, GOLD/GDX, ETC. AND THE SECOND WAS THIS...
In fact, as I typically say on Friday (or any day really), 3C signals usually pick up right where they left off, that's why I'm not that interested in 2-4 p.m. Friday price action, but very interested in the 3C signals, take SOPY for example...
Right now the EUR/JPY is in a small downtrend since about 2 a.m. this morning with lower highs/lower lows, the Yen has been trending up since 1 a.m. and the Euro has lost some ground.
The Spot VIX for once actually punched up on the close, but after the market headed down as if there were some seeking protection, but we already knew that from posts earlier in the day and with a reiteration of my liking VXX / UVXY long.
It's not like any of this is especially new, Friday it was clear that the same 5 min positive in futures I saw and wrote about as likely to bring us some short term upside (recall AAPL and SPY calls for this move last week) were clearly negative the next day and out to 15 min charts.
The NYSE intraday TICK was abnormally mellow today ranging from +600 to -500 most of the day until the afternoon when more stocks were selling off and we hit some extremes of -1300 after 3 p.m.
I mentioned some market signals were getting pretty nasty too in the late afternoon...
The funny thing and I don't know if this was for COMPQX $4k or not, but they tried to ramp the close.
However real demand could be found in the reach for protection VXX and UVXY (VIX short term futures)
The Dominant Price Volume Relationship wasn't dominant among all of the averages, some weren't dominant at all, the SPX and R2K however were both dominant as Close Up / Volume own which is the component stocks, not the average itself. This is the most bearish of the 4 possible relationships and typically is followed by a close down the next day on a 1-day overbought condition, however the other averages were mixed, perhaps we see dispersion, even though the market was about flat today we did have the SPX down -0.11% and the others around +0.07, +0.08 and +0.017%.
Among Leading indicators, as mentioned, HYG credit (an asset used for manipulation and one of only 3 assets that make up the SPY Arbitrage model) was used to try to ramp the market at the close, I'm guessing to get the NAZ Comp. to $4k as it is getting ridiculous now with 5 trading weeks in striking range.
Don't forget to check the earlier update linked above showing FCT longer term vs one of our breadth indicators for an interesting couple of charts.
Yields were negative on the day as were seen in the earlier update linked above.
And it was again, thee non-correlated (non-mamipulative) asset High Yield Credit, so we get a good feel for what risk smart money is or isn't taking.
HY Credit is NOT buying what equities are selling, actually equities are barely buying what they're selling.
For the full view see today's earlier Leading Indicators update linked just above.
Other than that and perhaps the changes in gold and oil which are welcome, there's not a whole lot more to go on today as it was a pretty flat day and I don't just mean price, but even the TICK, very little movement in the market. I am however shocked that after the Yen moves, the EUR/JPY, HYG and what ever other tricks they pulled out of the bag today that they couldn't get a lousy 5 points in the NASDAQ Composite to close it at $4k, this morning no matter what happened to the other averages, I figured that was a shoe in- 5 trading weeks of sitting right under it!
As for breadth indications, they don't change that fast, at least not daily, but again the NYSE A/D line still can't get above October's high and that's a bit of a problem considering other breadth signals we've seen and the 2007 breadth comparison I put out last night.
The NASDQ 100's daily A/D line is also below the October reading, as is the NASDAQ Composite's and the Russell 3000's.
The Absolute Breadth Index is a bit complicated to explain, but high numbers are often market bottoms and extreme lows are often market tops, this is the second lowest reading this year and the ROC on the move down is impressive.
At the right you see an extreme high is at a market low or reaction low, the red arrow is an extreme low that shows a market pullback, but can often be a top. March/April was the lowest reading for the year, but if you compare the most recent move, it moved a LOT further, a lot faster and likely isn't done, I'd think at minimum we are at Stage 4 of the 10/9 cycle, however this could also be the most extreme reading for the year and it may not be done, so this is one to keep an eye on.
There's not a whole lot more to go on, although I don't want to diminish the value of the signals in VIX futures, the averages, the Index futures, gold, GDX, individual equities, etc,
I think if anything really stands out today it is what I've been suspecting the last several weeks, the levers of market manipulation are becoming less and less reliable whether the Yen slam down, the VIX that just won't move any lower, the short half-life of central bankers words and even actions like the ECB's surprise rate cut, the SPY arbitrage ands individual arb assets like HYG and of course the carry trades.
I may take a look at the intraday NASDAQ 100 breadth, but that takes a while and I'd like to get this post out. I'll check futures for any abnormal activity later tonight and let you know if anything pops up.
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