Wrapping it up...

Yesterday it was clear, there was no strength in the market, I even ended the daily wrap saying I thought we opened lower today which we did by almost 10 ES points, that's a drop.

The trend I have been noticing is the assets used to float the market in the past are working less and less or not at all. I chronicled the shameful smack-down of the Yen to ramp the market in the low volume overnight session about a week ago, I wrote about it, A Sad Day for the Market. The reason it was really sad or pathetic was because they had to resort to something so blatant on no news, not even a thinly veiled smack-down, just wide out in the open, no apologies, but that told us something about the organic demand or lack of strength in the market.

This week that same trick was tried, it may have worked a little for an hour and then failed.

HYG Credit which has been used effectively for cycles almost all year (although being long term severely disconnected) all of the sudden starts accumulating for a cycle, the rounding process was almost complete and in a day it utterly failed and down HYG went.

Even the VIX, which was smacked down at 11:45 today, just 30 minutes after this post of 3C showing exactly that, however looking at VIX compared to the cycle, VIX has held up much better.

The Carry trades aren't consistent, they're falling apart and are falling way behind. It seems the only thing left to move the market is central bank jawboning, but as I showed earlier, even that lasted for an hour or two for the ECB, EVEN THEIR SURPRISE RATE CUT DIDN'T HOLD FOR MORE THAN A WEEK!

I'd almost say there's a change in QE perception.

This chart of the IWM is what the market's charts, Leading indicators, etc. are all in line with...

IWM downtrend and even the "Channel Buster" (as they always do) which initially looks bullish, tend to be one of the best head fake moves out there (bearish), look at the leading negative in 3C.

So I was thinking of putting together all of the charts as usual, but I don't know if the Yellen comments for tomorrow's Senate confirmation hearing were leaked on purpose, if they were known in advance, I don't know if today's move was based on a leak of this information whispered on Wall St. I just don't know, but what I do know, is what happened today doesn't seem to have much relevance to what happened after hours with the Yellen Leak.

If there is a change in perception re: QE, there are a lot of interesting articles by ex F_E_D members going as far as apologizing for QE.

What I do know is Futures don't look right considering Yellen's comments. In low volume overnight markets, it would be VERY easy to ramp the market on her comments, even if they were only used as cover, but something else is developing and I showed it in the last post starting.


It's true that I usually have little respect for 1 min charts overnight, too much can happen, but I'm wondering if these will shortly hit 5 min charts (it's just a matter of 5 min bars passing or "Time").

Here's an updated look and in fact, some of those 5 minute divergences are there.

Index Futures

 ES 1 min is even worse, but

It's the 5 min that can last the night, it didn't take long to get to this leading negative divegrence.

 NQ 1 min negative

NQ leading negative 5 min

TF 1 min negative now at a new leading lower low.

Other QE sensitive assets, the $USDX

 The dump in the $USD is seeing a leading positive divergence

And Treasuries...

 The pop in the 10 min is seeing a leading negative divegrence

 And look at the 5 min!

This is the 30 min 1 min leading negative

Again, ES 5 min, that wasn't there earlier.

Something is going on that makes everything that happened today irrelevant until we better understand this, but for now it was a slight pop on Yellen comments and huge distribution after or accumulation in the $USD.

Very Interesting