Daily Wrap

I hope you'll excuse me for not really knowing where to start today, early NYSE trouble, then half the market shut down for half the day with the NASDAQ and just about 30 mins before the EOD NYSE ARCA has trouble and order routing is suspended, if this all seems a little beyond coincidence, I'd AGREE.

As I mentioned earlier, NYSE ETFs can have NASDAQ components that are used for balancing the ETF throughout the day so it was very difficult to tell which asset could be trusted and which couldn't.

A few things that did work out as expected, a number of names posted yesterday for a bounce (in to a short) and a few as long trades we've been in all worked out pretty well today.

The Odd 1 min 3C divergence last night that I rarely post for overnight trade carried the market up most of the overnight session with the help of the long awaited USD/JPY pair.

The signals suggesting Transports see upside action were perfect with a 2+% day (depending on the transport ticker you use), in fact quite a bit from yesterday went as expected today, however I have to say these market shenanigans had me on edge. I said HALF joking that a market crash that was truly caused by the F_E_D could be blamed on some Chinese hackers hacking in to the NASDAQ, then just for a cherry on top, Carl Icahn's AAPL tweet just before the NASDAQ re-opened with AAPL by far the largest component, you wouldn't think the NASDAQ 100 would have closed green today if you had just heard the news of what happened, at least I wouldn't and certainly not some 1%.

Perhaps most interesting to me as far as longer term analysis goes, there's no good argument for treasuries to be a buy, yet I've seen great signals in TLT (20+ year) as well as the 30 year Treasury futures, I've showed you how the signals in the 30 year are positive, but the 10-year negative, today the 5 and 7 year were sold and the 30 year was bought.

 5-year Treasury Futures 1 min

 30-year Treasury Futures 1 min

That sent 5 year yields higher (vs the SPX in green), as yields typically act as a magnet for the SPX (equities) suggesting a market move to the upside.

However not everything was so cut and dry, for example our Leading Sentiment Indicator that has been leading positive the last 2 days made a u-turn today.

 Our first sentiment indicator (FCT) vs the SPX in green would have been within its normal range, the move to the downside didn't take place until after the NASDAQ was shut down, I don't know that this is relevant, but it's true.

Our secondary sentiment indicator (HIO) did well for itself today, but didn't take up the slack and lead the SPX here, while I wouldn't base anything on 1 or two charts, I certainly didn't like seeing this considering the circus of a market today.

As I have been saying for well over a week, the NASDAQ 100 / QQQ has been lagging the SPX badly in 3C action just as Tech has been lagging Financials, I even posted the Q's today just to show how bad, you can see the charts for the SPY from last night's post.

That leaves me with a problem, the SPY 15 min divergence is there and looks better now.

 SPY 15 min.

The IWM which was nearly as ugly as the QQQ crossed the bridge and completed its own 15 min positive divergence.

 IWM 15 min

However the QQQ is no where near one, in fact saying it is "in line" is probably overly generous.

QQQ 15 min.

I like to see multiple timeframes all synced up and pointing in the same direction, but even more important is that all the averages are doing the same. I've even checked the leveraged NDX longs and they look just like the Q's above, the only saving grace is found in index futures.

NASDAQ 100 E-Mini Futures with a 30 min leading positive divergence that looks similar to the SPX and R2K futures in similar timeframes, THAT'S IT FOR THE Q'S AS FAR AS CONFIRMATION...and good thing I have trust in the futures charts.

Otherwise credit performed as it should today, but didn't stun, it didn't post a strong leading divergence, both HYG and JNK were at least in line, JUNK credit a little better, High Yield looked a little less enthusiastic, but not running in horror as it usually does when its spooked.

As mentioned the USD/JPY was the engine we were looking for and it did its work today.

 This is the proxy for the $USD intraday in orange vs the SPX

And the SPX inverted in green vs the JPY ETF, USD/JPY (USD long/JPY short) which is one of the most probable engines to push this market.

As posted toward the close, intraday late day trade peeled away from price exposing a negative divergence in the 1 to 2 min timeframes, normally that would mean early weakness tomorrow followed by afternoon strength, however with all of the market problems, it's hard to say what was effected by what, in any case, as you can see in the SPY, it wasn't that big of a deal.

 The 1 min SPY negative divergence may look bad, but it's only 1 min, go to the next timeframe...

The 2 min was totally unaffected so this was really not that big of a deal, in fact because of the market issues I can't even say if it will have any impact on tomorrow as it usually does.

As I pointed out earlier today, HYG's very thin, unsupported reversal to the upside finally got some 3C backing behind it today, it also showed the same 1 and 2 min charts as the SPY above.

In yellow at the sharp "V" reversal HYG has no positive divergence, in white in finally filled in so it can be useful as market support.

As for Precious Metals, there wasn't much change from today's earlier update, except SLV's divergence is worsening, it stretches now from 3 min, 5, 10, 15, 30 and even showing up on a 60 min chart.

GLD added more to the 30 min leading negative today...

 30 min leading negative makes a new low

And the last 2 hours of trade intraday saw 3C diverging pretty badly in to the close which makes me wonder if this is the start of the reversal as gold past its 100 day moving average today by a hair, but that's enough to get goldbugs buying, allowing demand for the locals to sell in to or as we say, "A Failed breakout leads to a fast reversal".

GDX/NUGT/DUST didn't see any major changes today, but DUST's 15 min chart did catch my eye, I almost wish I had opened an equity long position here or short NUGT/GDX would be the same effect.

That's a divergence that's pretty close to what I'd call, "Screaming", it certainly jumps off the chart.

Beyond that, it's pretty hard to make anything of internals or market breadth when it was for all intents and purposes, a market half-holiday.

Unless today's bonanza in the market had more to it than meets the eye, I don't see any reason to veer away from current expectations for a market bounce that has clearly started and at some point shorting in to that bounce, it's just a bit frustrating today when you're blind to half the market and you can't be sure what you can trust with the other half.

I suppose I'll be watching futures closely tonight to see if anything interesting pops up unless they shut down too.

IWM Gets Its 15 Min Pos.

The NASDAQ and IWM were the laggards over the last week as far as 3C activity with the NASDAQ looking the worst (I wonder why, maybe someone knew the batteries running the NASDAQ were expiring this week), in any case the IWM didn't look as bad as the NASDAQ, but not as good as the SPY, it finally put in its 15 min positive and as per the last post you can see intraday trade falling off at the close on negative 3C signals in all of the averages I can check that haven't been shut down all afternoon.

 IWM 2 min in line all day as it rallied up +1.35%

The 3 min chart shows the theme I suspected and saw in a lot of places yesterday, the post-F_O_M_C minutes dip to lows were heavily accumulated in most assets including the IWM.

The 3 min also in line today which is good.

The 5 min from a leading negative gapping the IWM down to a relative positive at the lows.

The IWM has now joined the SPY and a number of Industry groups like Financials in a leading positive 15 min divergence, much of that came from yesterday.

This is the EOD 1 min chart, as mentioned in the last post, these 1 min charts have been negative in to the close, but the 2 min was not as can be seen above. This suggests some early weakness in the morning with strength building in later, however these are quite small intraday divergences at 1 min only in most cases.

Quick EOD Update

As for tomorrow, it's mostly 1 min and an occasional 2 min chart that are negative in to the close, I'd expect some early weakness off that to be faded to the upside later in the day.

Quick Update

After some big moves in IYT, IWM and others, it looks like we are getting a little toppy intraday.

Transports

Again, from last night's "Daily Wrap"

"Carrying on... I've noticed several sectors seeing nice 3C divergences, Financials has been one I've talked about, but one of the tricks of getting a bounce to work is making it believable, for any old-timers familiar with Dow theory, they're going to be looking for transports to play along."

Transports today...

That's a beautiful upside candle, trading at the highs of the day, up over 2% today.

Gold Miners: GDX / NUGT / DUST

This was an earlier update of GLD and SLV, they look very similar to GDX.

GDX is Gold Miners, NUGT is 3x long Gold miners and DUST is 3x short Gold miners.

 These are the important charts like in GLD and SLV updates, GDX with initial accumulation sending it higher in to distribution

NUGT has a similar chart, the recent negative divergence is what is important as it matches GDX'x.

DUST should look the opposite for confirmation.

DUST with a small negative taking it lower in to a large leading positive divergence.

I still have the GDX puts open and intend to keep them open.

TIN FOIL HAT ALERT!

Ah come on, SERIOUSLY? Just before the NASDAQ is to reopen and as AAPL was breaking $500 (I showed you AAPL earlier), NONE OTHER THAN CARL ICAHN TWEETS...

HYG (CREDIT) IMPROVEMENT

You may recall early when bounce indications were coming in two things bothered me, the 15 min positives in averages like the SPY/SPX that were very sharp and didn't have any real estate (price base) below the divergence to support such a divergence of that size, that filled in yesterday.

The second was the literal "V" turn in HYG to the upside, HYG Credit is a risk on asset and supports the market or a market move higher, in fact HYG often leads the market in moving first. The problem was the "V" nature of the reversal, there's just no time to accumulate a position in such a reversal, that's why there's a reversal process rather than a reversal event.

As of today, HYG has spent some time building a platform and has seen improving positive divergences, now with something under them to support them.

 HYG 15 min chart with a reversal event in the shape of a "V" at "B" and large volume just before HYG bottomed, almost like short term downside capitulation at "A"

HYG 2 min intraday  shows no support for the initial turn higher on this chart, but some built in yesterday after the F_O_M_C minutes out in an intraday low and at the closing lows, today it has stayed at least in line if not leading a little.

 The 10 min chart tells the story best, no accumulation on the "V" reversal, some has built up though since HYG has based laterally for a bit.

The 15 min chart is almost perfectly in line.

All in all, this is an improvement for HYG and its ability to support market upside. Who knows what happens when the NASDAQ reopens.

Does anyone find the horrible QQQ 3C charts over the last week vs the stellar SPY charts to be interesting given this shut down of the NASDAQ today?

NASDAQ QUOTE PERIOD OPENS @ 2:30, REGULAR TRADE OPENS @ 2:45

Market Update

To the best of my ability...

 This is the SPY ascending triangle from earlier, it just hit that resistance and backed off on heavier volume.

The SPY 10 min, just looking at what has been added recently.

SPY 10 min in context

SPY 15 at a new leading high

ES/S&P futures 15 min at a new leading high, I wonder if the closure of the NASDAQ is pushing trading activity in to other venues, I'm sure it is on a hedge basis, but otherwise?

 ES 60 min futures look exceptionally strong.

This is the NASDAQ 100 FUTURES 1 min chart, it's interesting it hasn't crashed (3C or price) and of course volume is way down.

NQ 30 min relatively unchanged from a positive position

TF 60 min leading positive

HYG IS SHOWING 3C STRENGTH AS WELL

Unreal

ETFs are managed by managers who buy and sell different securities too try to match the performance of the underlying issue the ETF is suppose to track, yes it's much more convoluted than you'd think, that means if you don't know every asset those managers use in each ETF, even if it trades on NYSE (and has NASDAQ components), you don't know if you can trust the ETF or not.

I just got through listening to a lesson on the VEEE-WAP from someone on CNBC who has never heard of it as she admitted, "I don't remember what that acronym stands for", It's Volume Weighted Average Price and even reading from cue cards she still couldn't spit it out correctly, but managed to pass on the information that the VWAP's of ETFs are not matching up as they should be, whatever in the heck she is talking about I don't know, but I do see how the ETFs component stocks would be a huge issue for non-NASDAQ listed ETFs.

In short, it's pretty darn difficult to know what to trust here and now, but I am watching very carefully for anything that jumps out.

Charts While NASDAQ is Down

This is a highly irregular event with the NASDAQ down after earlier problems with BATS/NYSE Arca.

Taking out my tin foil hat, if I'm the F_E_D and I know that the amount of leverage/Margin in the market and the HFT structure as well as rebalancing of ETFs in a decline that the F_E_D just released a 40 page paper on as they see it could accentuate a crash, I might look for a scapegoat to point to so the whole world doesn't say, "Ben did it" and there's no way to panic a trader more than not let him/her see their positions or be able to exit them, that can cause mass panic alone.

There's also been a strange number of $ weighted VIX PUT / Call ratios with calls way overloading VIX puts.

That's all the speculation for now.

The charts I was going to post in reference to that triangle breaking...

 The break of the bullish triangle that really wasn't...

At the same time the SPY 10 min chart is even more positive

As is the SPY 15 m

The IWM 15 mim finally goes leading positive.

ES 15 minis even stronger in a leading positive divergence

 ES 60 min is literally OFF THE CHART

NQ 15 min is positive

NQ 30 is leading higher

TF60 is leading even higher.

Almost all of the averages and Index Futures have stronger positive divergences since yesterday, that would make any head fake or break lower, highly suspect and a likely head fake as that is the fastest way to pick up a large number of shares without anyone asking questions.

In fact, perhaps a NASDAQ mini panic will do NASDAQ accumulation some good?

Either way, this event is EXTREMELY rare.

Market Exchanges on the Fritz

This is a little bit scary at a time like now, especially if you are a buy the dipper with no short coverage, but earlier there was a BATS / NYSE problem, now NASDAQ is down...