Market Update

There are a lot of interesting things gong on today, no doubt because of the last day of window dressing. The IWM underperformance after such outperformance and after we noticed the 1 min chart finally break this morning is interesting in itself.

The VXX is something I didn't expect to get a good signal on today, I figured as long positions are being closed, their accompanying protective hedges are being removed (thus VXX down), but out of the blue activity there is picking up quickly.

TWTR is getting far more interesting, I'd caution you to think about the use of options, I chose not to, there's a lot more to this one than just picking the directionally correct option, implied volatility is a huge part of understanding the trade, we have members who bought puts earlier and even though the underlying price is up significantly and you'd think that their puts should be underwater, they cashed out at a profit as the implied volatility is through the roof.

This is turning out to be much more interesting than I suspected considering the day after X-mas stuck between a weekend.

Index futures intraday are interesting as well, as you might imagine the SPX futures (ES) look the best intraday 1 min, and the R2K / TF futures obviously look the worst and I mean very obvious, in fact take a look, the NDX / NQ futures are somewhere between ES and TF, leaning quite a bit more toward TF.

 Intraday TF / Russell 2000 futures, what a nasty looking chart, this was an obvious change in character early this morning after the last several days were perfectly in line.

 The 5 min chart's which mean a lot more to me, TF 5 min

As for breadth, ny Custom NYSE TICK v. SPY, you can easily follow market breadth here.

This was unexpected, a leading positive, interestingly about halfway through the day before it started, but on a 10 min timeframe, even this leading positive building this quick is interesting and telling us something is going on, some kind of move from window dressing to perhaps something else.

I noticed VXX when compared to the inverted price of the SPX, started outperforming at 1:30 which confirms what we see in VIX futures / VXX.

The VIX futures intraday are confirming and showing there's a bid picking up.

 Gold which has been trading opposite the market has caught my attention recently and this 15 min positive is quite interesting. There's a gap and most gaps get filled, but recall what I said about a gap up as an essential element in a bearish candlestick confirmation signal.

XLF/Financials, this was seen before X-mas as well in individual names such as GS, JPM and some others.

XLK isn't very different (Tech)

TWTR I wasn't even basing the trade on 3C, but pretty quickly it has gone from nearly perfectly in line to an institutional timeframe (5 min) leading negative as it has crossed below the stop level, I'd like to see that hold on a close.

The Yen is of great interest, considering BAC has put out two notes, one of which they closed their USD/JPY carry, makes the divergence on this 15 min chart very useful, like the divergence we saw before BAC announced they just closed their USD/JPY position (the divergence I'm sure was BAC), this proves to be a very useful way to close the carry by being able to buy the Yen at an extreme discount.

In other words if I had an open carry trade that I knew had to be closed soon, I'd be hard pressed not to take today's discount to do so and the 15 min chart looks like some big players took up the gift to do exactly that.

Yields have started turning sour and they have been a spot on leading indicator for as long as I can go back on an intraday historical basis.

I'm going to see what else is happening and if there's anything that is worth taking a chance on (I don't care for end of the year trade as it's very deceptive whether tax based selling or Hedge fund performance, there are too many transient factors, but if it is jumping off the chart, it's worth a look.