Quick Futures Update

For the most part, all of the deeply oversold single currency futures look like they'll bounce off positive divergences including: the Euro (market positive usually-but we are getting in to strange times), the AUD and probably the Yen (which is the only market negative of the 3). The $USD looks quite overbought and looks like it will come down as well, what I wonder about is whether this is a move that occurs overnight and is over by the a.m., don't ask me why, just a gut feel.

As for the pairs, the EUR/USD looks like it will gain, although I'll say the divergence there is not very strong, this is more based on the single currency futures.

Interestingly, the carry pair, EUR/JPY looks as if it will head lower (a market negative) and USD/JPY looks to head lower as well as the 3rd carry pair, AUD/JPY. I'm guessing this is more about the Yen moving higher, in any case if all 3 pairs move down, it is a market negative and they look ready to move right now.

ES, NQ and TF are all in bounces, but all have negative divergences. So again for the third time in 24 hours, we have a market that seems like there's something not right, the first two I felt that way about I was correct, this one is even more fractured than the other two. One possible reason for this fracturing is different agendas, some closing carry pairs, some playing oversold bounces, some trying to play correlations that may no longer exist, in other words, The market is splitting which is where it gets very dangerous on the downside.

I'll update any developments, but the changes in character should be palpable to even newer members who aren't use to these charts and assets and changes in character lead to changes in trends.

I'll keep you updated as best I can, again, study the posts, the market, this is an environment that can be very profitable and few know how to trade it because it is so rare to see. I'd really take the time, even if it is just to study and learn.

Daily Wrap-Kind of...

Since I've already laid out most of my thoughts on the day, there are a few more that came from some email questions and I thought I'd share some of those.

One was about the Plunge Protection Team" which is actually the President's Working Group on Financial Markets (more at the link) which was created by Reagan in 1988 in response to the Black Monday Crash of 1987. This is a real thing, as far as their activities, as mentioned, I have witnessed them first hand as we were making a bottom in 2009, David DT and I made many observations about the PPT and got pretty good at predicting when they'd step in.

In any case, I have VERY little doubt that we saw the PPT or someone connected to them working in the markets today, it sounds tinfoil hat-ish, but read about the real group, you'll see it's not so conspiracy theory.

I think the reason we saw them today and the answer to a member's question can both be found in my email response, but first let me add an email about the PPT from another trader/member sent independently of my thoughts.

"Some time ago I read an article by a professional trader who had made a point to familiarize himself with the operations of the PPT.

 

Over a period of time, he had concluded that the role of the PPT was not to halt or reverse market declines.....but to step in and slow the rate of descent if a decline appeared to be on the verge of spinning out of control.

 

Interesting their intervention was required at this stage of the game.

 

Makes me suspect Wall Street has broken ranks already.  Also makes me wonder if the PPT saw an air pocket below the afternoon low."

We are nearly of one mind as far as his email. From what I saw today, the divergence in TLT to counter market weakness, which continued any way despite the move to send TLT lower, was no where near the size of the large positive divergence in TLT over a period of about 4-5 months. A 5-10 minute divergence/distribution in TLT would spook traders as it would be a fairly large order and would probably be obvious that it was coming from the same place if it wasn't in one order. The point being, traders see an order that size and it sends the asset down quickly, we have talked about this numerous times in the context of how smart money has to accumulate vs the way we open a position.

The point still being, the divergence was just enough to counter something really bad from happening in the SPY.

Now my email answer to the question, "How long do you think the PPT can hold the markets up?"

My answer...

"I don't think that is or was the issue today, with the Yen so low and the SPY not being able to do anything with it, the true nature of risk was revealed, they'd rather flock to protection than take on risk with a Very cheap carry trade today. With TLT Breaking out as the SPY was topping and with few shorts in the market to provide eventual buying support, today could have been a circuit breaker downside move. Look at how much the SPY lost even with that huge and very fast move to bring TLT down. Now imagine they didn't do that and TLT gained even more upside momentum, the SPX could have been down 2-3% today with circuit breakers tripped in the a.m.

It's not so much about holding it up as it is about managing the destruction, today could have got out of control. Notice even with TLT falling, the SPY still couldn't gain any ground, it went (the SPY) from the high of the day to the low in 1 move"

Notice my answer was along the same line as the email above and the email above I received after I had sent this response. I don't think the intention was to hold the market up, there are several key ideas in my response that bear further explanation.

Yen..

As you saw, the Yen's decline below support was at the exact same time the SPY moved above resistance in to the 2 p.m. highs, the thing is, the Yen moved much, much lower making FX carry trades exceptionally attractive and cheap-that's why I said that market participants were more interested in TLT (Safety) than a very cheap and profitable (potentially) carry trade.

Take a look at the extent of the Yen's fall and the Carry pairs...

 The Yen's decline is bullish for stocks, that's why when it broke below support, the SPY moved above resistance at the exact same time.

 Note the SPY (green) breaks to the upside just as the Yen (red) breaks to the downside, this has been the correlation since November 16th, 2012 market lows through the rally since, lower yen=higher market and that's what happened intraday today.

However if you look at some recent small declines in the Yen and how the SPX has moved up on them, when you look at the size of today's Yen decline, you'd expect that the SPY would do a LOT more with it.

 Remember I said the Yen was seeing accumulation late in the day, that typically wouldn't be good for the market, this is the 5 min chart of the Yen from today with a strong leading positive divergence.

Honestly it's not just the Yen alone that drives the relationship, but the actual carry trade between two FX pairs, the first long, the second short, this is how smart money leverages their AUM to buy more risk in rallies.

The Carry Pairs...

 AUD/JPY during regular hours-the pair moving up is positive for the carry trade and positive for risk assets, it moved up on the strong yen decline, however it seems smart money didn't trust the carry trade and chose not to embrace risk, but safety in TLT until it was hit.

Lets remember how all of this started, last night I saw the risk positive currencies and pairs with positive divergences as well as the Market Index futures like ES, NQ and TF. Even though they responded to the positive divergence and moved higher, I said something wasn't looking right, shortly after they spent the rest of the night moving to lower lows, a significant move lower.

Then same exact thing happened during regular hours today, the positive divergences were there and they even responded and started moving higher, but again they didn't look right and I posted this and the result was this massive decline in the currencies and downside in the market indices. It's very odd, but the same thing happened twice inside 24 hours and this is not something I recall ever bringing up on this scale and being correct both times.

The fact that something is not right here is another subject altogether and I think our first email from our member about the PPT may have hit the nail on the head when he said,

"Interesting their intervention was required at this stage of the game.

 

Makes me suspect Wall Street has broken ranks already.  Also makes me wonder if the PPT saw an air pocket below the afternoon low."

How many times recently have I used the AAPL example to explain that hedge funds herd just like retail, but when a market gets on the edge of an event like AAPL was when Dan Loeb's top 5 holdings no longer included AAPL, they do as the member wrote and break ranks, it becomes a "He who sells first, sells best" and "Every person for themselves". This is why I have said increasing volatility is not just a wider daily ATR or crazier moves up and down as we saw last week, but increasing unpredictability such as we saw last night and today. Had I gone by the signals only and not my gut feeling, our FX traders would have been in some big trouble, but after years of experience with 3C, I know when something doesn't look right, I called out both events at least an hour before and I was correct about both. This is not a failure of 3C, it represented what they started, it's just the herd didn't go along and instead chose to use the upside moves off the 3C positive divergences to sell in to and sell hard they did. *This is another reason I like to be in position by the time the market gets to this stage, I learned from trying to trade around small signals in AAPL to maximize profits, but hedge funds, "Broke ranks" and sent AAPL down 45%.

 This is the EUR/JPY, another carry pair that is market positive and profitable when it rises, this is during regular hours. Its climb is now being met with a negative divergence. Many of you must remember me following the Carry Pair trends very closely every week and pointing out they were going from positive to negative, then we even saw a decline with lower highs/lower lows.

I suppose smart money didn't buy the Carry because of this reason, they'd prefer safety than taking risk right now.

This is the same pair, just since mid-April, look how big today's move was, yet the SPY could do NOTHING to capitalize off it.

I told you why last night when I showed Treasuries accumulating to head higher and head higher they did today until the SPY apparently needed protection and there was a negative 5-10 min divergence all at once in TLT to help the SPY, but my point was, TLT is the only asset I remember recently that actually saw increased volume (nearly 400% the average) on a breakout today of VERY weak resistance, yet the Dow 15k was on less volume, the SPX new high was on less volume so where do you think the demand is?

Just as a hint as of before any intervention...

TLT breakout on increased volume from very light resistance, the volume really didn't need to be that big for such light resistance, but there was demand.

Then of course the 2 p.m. intervention as I already showed, the SPY was losing traction (3C, candlestick reversals, declining TICK chart, etc).

If you look at the time stamp on the chart, the reversal from moving down (which was in large part because of TLT's gains, happened almost exactly at 2 p.m.

It just so happens that at 2 p.m we had the TLT negative divergence and why would smart money do that if they were so eagerly buying TLT days and even minutes earlier as the accumulation has shows.  The only group I can think of that would have an interest is one trying to prevent a rout in the market, the PPT and they didn't use such a large divergence that anything would be changed in the underlying trend, just enough to back the pressure off the SPX which continued to fall despite the falling TLT which is what caused the SPY Arb to continue to rise.

 SPY 15 min negative divergence at 2 p.m. highs

TLT 10 min relative negative divergence (the weakest kind) today at the SPY's 2 p.m. highs as it was just about to fall and fall it did despite TLT coming down.

TLT's 15 min chart with no damage at all and still in a large, powerful leading positive divergence.

If you are wondering what High Yield Corp. Credit it doing (HYG)...

 HYG 2 min distribution

HYG 5 min leading negative divergence

Here's what VXX looks like

 VXX 1 min leading positive

VXX 2 min positive

 VXX 3 min leading positive divergence

VXX 30 min

What I get from these charts is not only is the longer term positive, but the very short term is positive and migrating as it should.

I do see some 1 min type positives in some of the averages so there may be some early attempts, we'll have to see how they play out, but with VXX so positive and HYG so negative, it seems unlikely much strength can build.

 SPY 1 min intraday positive, but it also has moved off that divergence so we'll just have to wait and see, it certainly isn't anything I would have placed a long or closed a short over.

The SPY 3 min looks pretty darn far from anything resembling positive, again the VXX strength and HYG weakness suggests we have turned a page, and I think that page we may have turned is that which I have warned constantly about and that our member's email touched on, "Wall Street has broken ranks already." if so, this is truly a dangerous time for the market.

Afternoon sector performance also moved toward a defensive posture.

Financials, Industrials and Tech all rotated out in relative strength, the safe haven groups of Staples, HealthCare and Utilities rotated in.

In any case, summarizing my email response, even with TLT as a lever being pulled severely, the SPY still lost ground, had TLT kept moving higher, the SPY would have lost even more ground, the move in TLT was large for a lever pull so I shutter to think of what the SPX might have looked like with TLT higher and the average completely unable to take advantage of a severely lower Yen. I do think PPT involvement was obvious, but it doesn't seem to have been aimed at holding the market up as much as protecting against an out of control decline. Remember, shorts are not very thick and shorts represent future buying commitments, without their covering(buying) to take profits, the market would have no source of demand, so next time someone tells you how evil shorts are, remind them that shorts keep market declines reasonable and from straight 90 degree drops.

Remember we do have the typical Friday op-ex pin possible, I think whether the market moves to pin or acts significantly different will also be VERY telling. All in all, I'm very happy my positions (both Puts and shorts) are in place. This is the kind of market environment in which you can wake up to a gap down that wipes out 2-3 months of longs right on the open, we saw almost 2 months of longs cleared once this year already on significantly lower volatility.

Someone Else's Perspective

I rarely criticize someone else's views or methods, but in this case, this website is just plain wrong and they almost admit it right in the beginning.

Before we get to their chart and commentary, their view is the market closed down because of a QE-OFF rumor on TWITTER! First of all, we have been documenting the F_E_D's slow boil of the frog method of slowly acclimating the market to the idea, setting up yardsticks like employment as a measure of whether we need QE or not and then manipulating employment data to walk themselves out of QE, all along having had given the market plenty of notice.

The fact the F_E_D was getting ready to make exit plans is something I have been documenting since Sept. 13, 2012 when QE3 was released, that was the first move when they talked about changing QE from a time based (no wiggle room) program to an economic based (lots of wiggle room as economic reports are easy to manipulate), then they actually did it and then tied it to jobs and then created a trend of better jobs reports.

When you look at the market, breadth, 3C, long term leading indicators, you can see there has been a flight to safety and distribution since the 2013 rally started, why since then? Because Wall St. understood as of Sept. 13th also what the F_E_D's intensions were, this is the reason this was the only F_E_D QE or other accommodative policy program that was announced and the market didn't rally, but instead fell. It fell to the November 16 lows and we have had a rally of some kind ever since and they have been unwinding everything including (and this is why I followed treasuries so closely for so long), the FX carry trade they finance their positions with.

In effect, the market fell 8% after QE3 was announced and the first rally after, they have been selling in to the entire time, buying protection and moving to Safe Haven assets.

So now to the other site's analysis.

They start with "Treasuries had an odd day", yes, that would be odd. Yields move the opposite of treasuries, we are looking at yields above similar to TLT's timeframe. Why would Treasuries fall after an auction went better than expected and especially if the market is scared that QE might end? Treasuries are exactly what they'd buy, even if it was just based on normal arbitrage-market down, treasuries up.

However if you read the last post, there's nothing strange at all in how Treasuries acted today. The SPX could barely generate any interest as evident by the TICK, at the same time SPX was pressured by a breakout in TLT, that's when there was a quick distribution move to send TLT lower and still the SPX fell.

Imagine if TLT was allowed to continue higher with stronger momentum off the breakout as we were seeing (the first breakout market wide that actually had increasing volume! NEW SPX highs couldn't do it, Dow 15k couldn't do it, but treasuries breaking a very slight resistance zone to the upside kicked volume up about 400% above average.).

So even with TLT falling in the afternoon, the SPX still couldn't get a grasp, imagine what would have happened if not only TLT had not been manipulated back down to  help the SPX from collasping, but TLT actually moved much higher as it was poised to do, imagine how low the SPX would have closed then. Next imagine the orders on the open tomorrow, we'd likely have a circuit breaker.

I was asked, no I don't think this was manipulation at any cost to keep the market up, I think this was a realization that with no built in future demand (shorts-as their covering creates buying and helps keep declines orderly), I think they (and I believe it was the PPT from the NY F_E_D's trading desk) were trying to manage an event that could have spun out of control very quickly. Rather than trying to hold the market up, I think they were trying to prevent absolute chaos.

Another View

Yesterday there was so much data, so many things happening so fast and so many important things, I had no idea where to start, today was even more so.

If you are not absorbing these posts from the last 2 days, or really this entire week, you are missing out on a chance to learn a lot about the mechanics of the market because there are few times like right now where these specialized tools and techniques are used, if you miss it now, you may have to wait a decade before you see it again.

So lets just look at the SPY for a minute because it was not only in trouble on its own, but from external sources as well. I'll remind you that when David DT (who many of you know) and I were trading together, we were witnessing the PPT at work and had become so adept at predicting their moves, we could call intervention within 10 minutes. The trading desk at the NY F_E_D isn't on lunch break, these guys know what they are doing, they have the capital, they know where to deploy it if need be and when the need to act, today is a prime example.


SPY (And I'm not even looking at or considering any other index).

This is a 15 min chart of the SPY zoomed to intraday, a divergence on this timeframe, even though it's zoomed to intraday, is serious business, it is large flows of money moving in or out of an asset. The first divergence was near yesterday's close, traders were using the strength to set positions or close out longs.

Today as the SPY crossed the unchanged mark for the day (light blue line below the white arrows), the SPY put in a bearish reversal candle set- a "Doji Star" with bearish confirmation and that was in to heavy 3C distribution as you can see and about 2 p.m.

What other proof do we have?

The Yen, I saw something so important in the market, specifically currencies and specifically the Yen and $USD, I spent 10 hours on my weekend to write a two-part article, "Currency Crisis" which I will put in the links section. Not only did I predict that the Yen was going to have more and more influence over the market (it already has more than the Euro, $AUD, even the $USD) and more importantly, how the big picture for the Yen and the $USD were shaping up and what that meant for the market, which is not good at all. Ever since, either everything I wrote about has happened or at least nothing I wrote has been contradicted or proven wrong.

Here we see the SPY (green) vs. the Yen (red) and the Yen has support at the red trendline, the SPY resistance at the green trend line and although I've seen this many time the last few weeks and have pointed out and even predicted that major intraday tops and bottoms would line up exactly with the Yen, the only question I had was who was driving who-it's obvious to me now as I suspected, the Yen is driving the SPX. They both breakout/breakdown art the exact same time above (green arrow).

Remember I mentioned the Yen was starting a positive divergence after the fall? Lets look...

 There's the start of the divergence on the Single Currency Yen futures, a closer look...

The Yen's positive divergence starts right at 2 p.m.

That also happens to be the time the SPY Arbitrage model shows something is changing that will support the market.

That's 2 p.m. when Arbitrage starts moving up.

What else?

The SPY's "BIG MOVE" (sarc.) couldn't even break +500 on the NYSE TICK, this is all NYSE listed stocks-thousands with all gainers counted minus all decliners per bar. Almost the entire SPY rally it barely ever broke +500 which is typically what we see when the market is absolutely flat and it's a half day-holiday with few traders. A rally or bounce intraday hits +1000, +1250, +1500, but +500 at the maximum and as it makes it's high in to the 2 p.m. hour the TICK starts to decline to the +250 area at the highs of the day of all NYSE stocks, only 250 were outperforming at intraday highs?

If that doesn't convince you of the weakness in the SPY, I'll have to write some custom indicators breaking it down by the hour.

Remember, pros can see the entire depth of the book, if there are lots of large sell/short orders lining up, they know and so does the PPT.

The SPY with help lost .75% and went from intraday highs to lows in one move and that was WITH MANIPULATION TO HELP THE SPY, IMAGINE WHAT WOULD HAVE HAPPENED WITHOUT IT!

As we already know and many of you commented on and as I mentioned last night, TLT was purposefully pushed lower to allow the market breathing room where it was already at resistance, after that happened is when the new highs came in, but TLT was being accumulated to head higher again, just look at today's action before manipulation.

 There was already strong accumulation of the lows ready to send TLT higher...

On a 15 min. chart of TLT, look at that p[rice candle's strength and the volume that's 3-4x average volume on the move THROUGH resistance, it sliced through like a hot knife through butter. Can you guess what time? TLT was already pounding the SPY Arbitrage, this move as the SPY was petering out and whatever they knew about the depth of the order book was enough to scare someone large in to taking action to prevent who knows what could have happened? With few shorts to provide any buying (taking profits by covering), there's no telling how deep the market could have fallen, shorts provide natural support as they cover which keeps declines in check, but with so few, it could have really got out of control.

 Leading Indicators, TLT vs SPX (green), remember earlier I mentioned that even the normal correlation in the first red box of SPX up, TLT down wasn't normal as TLT didn't move down much, it had buyers keeping the correlation biased, then as some of you emailed me today, you were surprised to see TLT moving up with the SPX, I've been pointing this out all week, in many cases it's relative performance, but many others, pure demand overwhelming the correlation. Traders DON'T trust the market, they're moving to safe haven assets like Treasuries.

This is the EOD for the pair, TLT is knocked below the intraday correlation to give the SPY as much help as possible.

And how was this accomplished? We already saw, but I mentioned the VXX 3C chart rather than TLT.

TLT with huge accumulation to the left and it's breakout through the red trendline resistance-all of this with the yen starting to go positive, plus whatever they knew about the book, was too much, they had to take action quickly and few hedge funds or institutions are going to do this, this was PPT in my view, they spent enough (a relative 10 min negative divergence ) on a negative divergence somewhere between 5 and 10 mins-both institutional timeframes and did it all at once, as mentioned earlier, any trader seeing that kind of block come through at once in that size would assume something big is going on, it was just the lever being pulled hard enough to overcome the current demand.

 As I already showed you, it wasn't even close to enough to effect the long term underlying trend, it was more shock than size, shock that an order that big would come across the tape in one piece, it must have looked like panic.

I'd say between last night's currency events and today's currency events already addressed in which divergences were in place and they were killed suddenly, you recall I said both times that , "Something doesn't look right", I think is clear evidence we've hit the unpredictability part, which is every fund for themselves like what happened with AAPL, there's no coordination, just selling at every and any chance they get. This was the unpredictability I said we'd see, it was bound to come sooner or later as one fund decides, "We will sell/dump first", then the party is up, AAPL is a good example of what happens when the institutional herd scatters in an "Everyman for himself" environment.

TLT-Cranking on that Lever

It looks like They're cranking on TLT pretty hard, although there's a reasonable play there, it seems VIX Futures as well, HYG is pretty hard, that's being sold hard. They had to do something to keep a panic so I wouldn't doubt some NY F_E_D traders stepped in, they had a .75% loss in the SPX in about an hour off highs of the day.

Remember what I said in my last post.

Lets take a look, although I won't have the leading indicator style charts here...

2 p.m is when the Arb situation started changing for the positive, that's also the time pressure set in on the SPY and it lost ground from the intraday high to the intraday low in 1 uninterrupted move.

 This is VXX, I got a lot of emails today from people amazed to SEE TLT moving up with the SPX, this is what I've been showing you all week, it's been happening through relative strength, they couldn't move the VXX or TLT because there was real demand there, today they seemingly gave up for a while as the Yen seemed to take over, but even that started to change right at 2 p.m.

This 5 min chart of VXX shows there was definite a move to suppress its intraday strength as that makes the market situation worse.

 As far as the real demand trend

 goes, as I have been saying, this isn't new, this has been going on all year and if you wonder where the money came from as the market was making new highs, look at the decay in breadth from 80%  bullish stocks to 40% as the market was making new highs, more and more stocks were selling off below their 40 day and 200 day moving averages.

This is a 4 hour chart, that's serious demand.

 TLT on a 2 hour, I showed you the positive on the daily last night, this is a bit more detailed, GAIN, SOME OF THIS STARTED SINCE THE NOVEMBER 16TH CYCLE LOWS AND RALLY, MOST STARTED AT THE NEW YEAR AND ACCELERATED AFTER THE TREND CHANNEL WAS BROKEN AND THE YEN STARTED SHOWING CRACKS IN ITS TREND.

(sorry about the caps, I didn't notice).

TLT intraday still has a beautiful reversal process, last night I showed you the move to bring TLT down and how it immediately allows the market to make the new highs, in fact to push through some resistance.

However, as beautiful as a rounding bottom is, we all should know by now what the highest probability play is here, you see the support, the yellow arrow is a hint.

Some of you have asked if I have long positions open in TLT, I always tell you before I start any, but the answer is no, however if you are interested, a head fake move with 3C positive confirmation is the best entry, it also gets some heat off the market for a bit as this is one of the levers.

 TLT 15 min doesn't show any damage, but they had to use enough to make a serious difference and fast.

The 1 min chart shows some, although this may just be the normal manipulation. It's really the 5 min chart that did it, that's large enough to come across as institutional selling, oit was done in a short timespan so any tape readers are going to immediately think there's something negative going on in treasuries, but more than anything it moved the lever enough, fast enough to halt the SPX slide.

If you like TLT, be patient, if you are using leading indicators, don't forget this post, I can see a bunch of emails saying, "Did you see what TLT did?" Now you know, they used enough firepower to raise questions, but more importantly to send it down in the time they needed which was immediately.

Arbitrage is Positive

It's Not Going to Be As Easy As You Might Think

These red flags in divergences last night and today show me something, just like with AAPL, the herd is breaking apart and the "He who sells first, sells best" mentality is taking over. This is every fund manager for themselves now, this is why the market gets more unpredictable, the herd is breaking apart, that's what last night and today's FX signals were all about.

Obviously a lot of things are looking like we are seeing a serious change in character in the market, I'd say the serious change, the time to really pay attention and when we look back in the future was when the trend channel broke. AAPL had a moment like this too, when its back was broken, but it still made additional gains, as I warned back when the Channel broke, "A Snake with a broken back is more dangerous than ever".

The changes in character have been in front of your eyes all this year, but especially this week, not simply today.

The point is, Volatility is not going to get batter, this isn't resolved and we all are happy shorts. The volatility will get worse, the emotional swings will get worse. Wall Street doesn't  want anyone riding this train early, they want you to chase it and they will make life very difficult until then.

Be aware of the volatility not just in price, in the daily ATR, in the intraday moves, in an emotional way.

Your best defense is to enter trades at favorable areas, low risk, good entries and high probabilities, this will allow you to ride out the onslaught coming.

Now more than ever, be patient and keep your eye on the big picture, the day to day and even week to week stuff at this point is great for tactical use by us, but you have to look beyond that at the objective data, not emotions, not CNBC headlines or Cramer.

GDX

A few people have emailed me about GDX (short and long), don't try to catch a falling knife, there's almost always going to be a reversal process. Beyond that, as I don't have time to lay out every chart for GDX, let me just give you this, you can see what happened here very clearly.

GDX was accumulated enough to take the gap down move and create something they could sell/short in to, that's what they did. As a long, no way, not here.

As a short, I wouldn't consider Puts right now, as for the 3x leveraged short ETF, DUST, there's decent accumulation there, I'd prefer a pullback rather than chasing here, but I do believe over the course of a week or two it will be significantly higher, at least well clear of the recent congestion.

AMZN PUTS Are June 22nd $265

Charts coming

Starting June Monthly AMZN Put and adding to AMZN Equity Short

The Put will be June monthly expiration, slightly in the money.

MUST READ Currency Update- Which Means Market Update

***I would read this entire post so you understand what the justification for it is, but if you want the bottom line, skip to the bottom.

I find this absolutely amazing. First I'm not the type of person to bring something up without what I consider to be objective proof, last night when I brought up the fact that bullish signals in risk currencies that should send the market higher and did for a short while, "looked" fishy to me, that was this post, last night.

The exact words were...

" looking at the charts. something doesn't look right, it's not consistent yet through single currency futures and the pairs, but for example, the Euro which moved up, has a worsening negative 3C tone, the Dollar should look worse, but almost looks as if it's about to transition to a more positive stance. R2K Futures have a negative divergence and couldn't make a new high."

While ES and NQ were making higher highs, what I saw in the IWM stuck out, it didn't look right and what happened after that? All of the Index futures topped right there and headed lower. The Euro which had a positive 3C divergence, but the tome of 3C was going negative on a brand new positive, what happened? The Euro and all other risk pairs including the Aussie that rallies much higher on eco-data-all fell overnight as did of course the R2K futures.

This was not what I'd normally bring up, but after years and years of using 3C, something just wasn't sitting right.

That happened again this morning/afternoon starting with this post, "Not to Get Ahead of Myself" in which I said,

"In any case, I may be getting ahead of myself as this may just be an intraday wiggles, but this is also how a new move starts. I see weakness and some negatives already brewing in the risk currencies, Euro, $AUD, EUR/USD, etc which are coming off swing lows, they should move higher, but are already showing 3C weakness as the $USD is showing 3C strength-just as I said last night and this morning, something doesn't look right with this market!"

Then this post followed..."Currency Update" which documented exactly what I was talking about above, again a situation that wasn't screaming, but something wasn't right with the market and FX.

I suspected that the positive divergence was turning negative and the risk currencies would fall, here's what happened next just a bit ago.

 The Euro, as I was suspecting, dropped lower instead of rallying.

 The AUD did the exact same.

The $USD which was suppose to move down, but I suspected it would move up- look.

The EUR/USD which was set for a move up, but something again wasn't right, instead a move down.

The thing is, these aren't just moves in the opposite direction, these are HUGE moves in the opposite direction to new lows and highs for the week. The market is telling us something. 

 The EUR/JPY as JPY weakened considerably

USD/JPY as USD strengthen and JPY weakened considerably.

And the Yen, you saw the correlation.

In my view, these subtle red flags on existing signals is the market telling us the AAPL scenario is taking hold, some are breaking away from the flock out of fear which we know exists among smart money because we can see it all week and even longer in TLT and VIX Futures, there's a massive flight for protection and safety.

Beware.

Yen is starting a positive divergence intraday

I think it's been clearly shown, likely due to carry pairs, that the Yen as suspected over a month a ago, would have an increasingly important role in moving the markets.

Right now after a huge plunge (market supportive), it's putting in the start of a positive divergence while the SPX's more important charts look like this...

 3 min saw distribution in to that SPX run

So did the 5 min

And the 15.

With the Yen starting a positive divergence, well you saw what happened when the Yen broke lower, the SPX broke higher at the EXACT same moment.