Market Update

So far I think my gut feeling was/is right. There are a number of averages that are hitting deep negatives and a lot of them were already leading negative, but added quite a bit today, especially on that last little flag move at 1:45 to present.

The Yen which is something I think is a key component to the carry trades and thus the market overall, is going positive intraday, it's already positive in longer timeframes, as I said last night, I think some of that positive we saw was Bank of America covering their carry trade in USD/JPY, if they are, I suspect the rest will follow and I have thought since writing "Currency Crisis" in April that a rising Yen would accompany a falling market.

Market Breadth should be interesting later when I update after the close because TICK was so poor today.

The SPY Arbitrage is still running and at +$.80 when the SPY is only up $.85 ($.05 of SPY movement, $.80 of Arbitrage?)

HYG is still following or the market is still following HYG, but the negatives in HYG have progressed even more, I have a feeling the Arb. is all about Window dressing, Thursday is the last day for Q4 and 2013 so it's the most important Window Dressing of the year or "The Art of Looking Smart".

Yields  are in line and not offering the market any edge. 

Commodities were tacking along with the market fairly well, they just peeled off around noon.

I'll have to see what internals and the close looks like, but I think it was a smart decision to be patient here, this feels like it's different than past 5 min negatives that were an easy trade to the downside, this feels bigger, the SKEW is tail risk from out of the money options, and tail risk (Black Swan ) is huge, the biggest on record since the CBOE released SKEW (similar to their VIX).

Right this moment, it looks like VXX is being pushed lower because HYG isn't able to hold its gains.

I'll be back to take a look at more of course after my appointment, perhaps I can better put an objective face on this gut feeling, but so far the gut feeling is tracking correctly.