Thursday's Wrap... The Gist

Before I go in to the Wrap for Friday or even the week, in case you missed it or forgot, I think this is pretty important to understand, especially as it relates to forward looking analysis. I abbreviated things so they are easy and quick to read.

This was kind of the gist of Thursday and all of this is taken directly from Thursday's Wrap...

-The NASDAQ 100 took out almost 3 weeks of gains (1-day short) in a single day
-RE: The Russell 2000: all of the downside damage which is over 50% of the entire cycle was essentially done in only 2-days.
-RE: ES (The SPX E-Mini Futures: This is more than a 32 point ES drop from just before 8 a.m. this morning to 3:50 this afternoon,  which is the biggest intraday plunge since June. 
I think most people could be forgiven for expecting the market to see another nasty downside day today, but our analysis suggested something totally different short term (as in TODAY)...
Excerpts from yesterday's post and charts linked HERE ______________________________________________
The Gist "I'm thinking  SOME UPSIDE FROM HERE IS HIGHER PROBABILITY"
Transports  The IYT/Transports chart, I think we'll get a bounce we can use to short in to, price alerts for a bounce should be set, the 3C trend is quite clear.
Financials In Financials, our FAZ (3x leveraged short financials) is in the green, these are the short trading positions I didn't want to let go of. I do think you'll get a chance to grab a position here on a pullback
Yesterday's Overall Action I DON'T WANT TO BE TOO QUICK ABOUT CALLING A FINAL TOP, A LOT CAN HAPPEN FAST, BUT I HAVE NO PROBLEM CALLING OUT SEVERE WEAKNESS IN THE MARKET.
Credit " Intraday HYG was a bit stronger at the close, there's a lot of momentum/weakness today, but the funny thing about downtrends and bear markets even is that they tend to have more up days than down days, the down days are just a lot bigger.
So we may get a bounce here as op-ex comes in to play tomorrow, perhaps a higher max pain pin, if so it would be useful in positions like FAZ long on a pullback."

"Junk Credit is NOT used as a manipulative asset like HYG, but is High Yield, it also had a stronger close hinting to me we'll see a bounce, for now I'd say this looks good for a move to the upside allowing some new positions to be entered at better prices and less risk."

Sentiment Indications

"This is one of our two sentiment (pro) indicators. Intraday today it wasn't STRONG for an upside bounce tomorrow, but it was stronger in to the close hinting at some near term upside, which may not move above today's range, but may be useful as a tactical entry/exit.:

"This is our second sentiment indicator showing similar strength (not very strong) in to today's close suggesting at some likely upside tomorrow or very soon."

Short Term Yields

" Intraday yields also pulled up after reverting to the mean short term, this suggests some upside near term"

MCP To See Upside Today

After earnings that weren't initially taken so well...

" 3C was developed on the TOS platform originally for AH readings, in this version MCP makes AH lows in to a 3C positive divergence and ends the session at $4.76, right where it closed during regular hours."

PCLN to See Upside Today...

"PCLN beat on top and bottom (Revenue and Earnings), but failed in the most important aspect of earnings, Guidance and guided lower...

PCLN AH hit some deep lows on a 3C positive divergence, apparently someone accumulated those lows and is sitting on a nice little profit as PCLN closed AH ay $1012, about 10 points below regular hours, but well off the $945 AH print."

Dominant Price/Volume Relationship

"The Dominant Price/Volume Reading tonight among all of the major averages (the components of the averages) was a very dominant (about 50-75% in 1 relationship of 4 possibilities) CLOSE DOWN/VOLUME UP, this is a VERY bearish relationship, BUT SHORT TERM OVER THE COURSE OF A DAY OR SO, IT OFTEN ACTS AS AN OVERSOLD SIGNAL SO A BOUNCE FROM THAT SIGNAL WOULDN'T BE SURPRISING."

Short term 3C Signals

I have positive in the IWM from 1 to 3 mins. While not as consistent among short timeframes, I have intraday positives in the Q's as well and a couple weak ones in the DIA, not so much the SPY so that would be consistent with some of the intraday leading indicators like credit and sentiment, also with the Dominant Price/Volume Relationship and a few other indications.

"I also have 5 min positives in the Index futures so I'm thinking  SOME UPSIDE FROM HERE IS HIGHER PROBABILITY, BUT THE LEVEL OF DAMAGE IN THE MARKET CANNOT BE OVERSTATED. "

And Up We Went

As I said so many times today and yesterday and demonstrated very clearly last night, the consistiency in signals through just about everything suggested a move higher today. A couple of things I said early today so they weren't in reaction to the closing activity and many are often repeated...

First was the consistiency of signals yesterday, even Dominant P/V trend alone suggested a move higher today, in fact based on yesterday's Dominant Price/Volume relationship, I would have said the market will more than likely make a move higher today, add everything else and it was just very hard to imagine it not making that move.

However the other side of the coin was those same signals that were so consistent in all these assets and indicators, were just as consistently weak and at last look,they flipped already (I have to check the closing prints, but I updated earlier for leading indicators and all had already flipped to a level almost as consistent as yesterday in which I'd say, Monday we'll be down (I still have a lot to look at, but that's how severe or short lived those bounce signals were.

As I always remind on a Friday or the day before and warned this morning at 11 a.m....

"usually around 2-3 p.m. most contracts are closed and the market starts to act whichever way it wants in to the close.

I've found that the price action during this time has little relevance on the next week's open, but the 3C signals often pick up the next trading day right where they left off on Friday or the day before."

I'm updating and getting ready to look at all of these signals closing prints, however there's nothing really obvious standing out like that middle of the night smack down in the Yen on no volume and no news that sent futures higher, blatant manipulation.

I did see several things that contributed, one was a short squeeze, one was a VIX slap down, but 2 of the more interesting things were 

1) The Russell 2000 which generally leads a move up, DID NOT participate at all in that closing ramp and 

2) Even though stocks did make it through the NFP print after an initial upchucking, the QE sensitive assets DID not, Gold traded down, treasuries traded down and the USD traded up.

IT WAS LIKE AFTER THE NFP, STOCKS DID WHAT THEY WERE ALREADY SET TO DO THE DAY BEFORE, BUT THE QE-SENSITIVE ASSETS DID THE EXACT OPPOSITE AND REACTED THE WAY YOU'D NORMALLY EXPECT THE MARKET TO REACT, THEY ACTED AS IF THEY TAPER IS ON, WHILE STOCKS ACTED AS IF THE TAPER IS OFF, THIS WAS VERY INTERESTING.

I didn't have any idea as to how high this move up would go or last except that the signs were all short term (that's why I called it a mini-cycle) and as mentioned, the assets that pointed to it were also very weak.

I'll update later after looking around, but the move after 2 pm is not very surprising, even the fact the market moved up at all after the NFP is not surprising because Wall St. rarely abandons a cycle they set up.  To me, the price move is interesting, but not much more than a curiosity, it's the 3C signals and the other assets (like leading indicators that count, THEY ARE THE ONES THAT TOLD US THIS WAS COMING AND I'D BET 80% OF TRADES EXPECTED ANOTHER DOWN SAY TODAY.

So, it's important to keep an eye on what's important and to put that which is emotionally moving in it's place and perspective because this didn't look like any solid risk move, it looked like market emotional terrorism and I'm sure many of you can feel it, that's what it's designed to do.

Have a great weekend, I'll post more soon!

MCP Quickly

I'm prod and happy with MCP today, it has stayed in really good 3C shape.

PCLN Core Short Update

I' don't think I've had so many people interested in shorting a stock before, I'm not sure why? Maybe revenge trading from previous losses, maybe the "Bigger they are, the harder they fall", maybe it's just seen as a momentum monkey's stock and has no right to be trading at these levels or people don't like William Shatner, in any case, here's the update.

I have a partial core short position started with room to add, I won't be doing that today because I have more important things to do, but above $1100 and I'd be really tempted, that's not a forecast or prediction, just an area that I'd be interested in.

 PCLN Daily chart, the volume today is interesting especially because it doesn't look like the "typical" churning candlestick. Yesterday's volume was up on a break of support levels.

 A 60 min look, from left to right, the support level, a hammer with increased volume, then a break triggering stops and shorts and then a gap up after last night's 3C earnings which you saw, they were strange.

 I wanted to check this out well because there's just so much interest so I used the Trend Version of 3C, it reduced noise, but details with that, but gives a better clean trend and that;s clearly leading negative to new lows.

 10 min which is much more significant than the normal 3C 10 min because of the trend version, also leading negative at a new low.

 15 min negative at a shakeout candle right out of the triangle (the first 15 m candle) and in to every high since.

60 min in line, but getting funny around the yellow arrows, then leading negative, it looks like the back of the trend was broken there, again negatives in to any higher prices.

 If you really wanted to play this safe or if maybe you entered a partial position here and then the rest on confirmation, the Trend Channel would give a solid sell/short signal around $990, which makes sense as I'd bet most stops and shorts are right at $1000. This could mive a little higher (the Channel/stop), not much.

3C intraday looks like a lot of the market

3 min as well

5 min leading negative

 15 min

I've shown a real clear 30/60 min, but I figured I'd mix it up and show this 4 hour which is a really strong trend and it is leading negative so distribution has been taking place.

I also marked $1100 in yellow, you can probably see why I'd be interested in that level, but I have no evidence that we go there beyond market behavior, but this isn't a slam dunk as far as behavior goes either.

Important Intraday Market Update

There's just a lot to look at today to decipher what's going on under the surface.

From the move expected yesterday which we have and the weakness of the signals, I'm not surprised to see EVERYTHING negative intraday, it has been building all day since earlier mentioned, the SPY, QQQ, IWM, DIA and all Index Futures.

So far I don't have a smoking gun and I would be hard pressed to say this is just noise after yesterday's market whooping, the dominant Price/volume relationships suggested a 1-day oversold condition and thus far pretty much everything looks to be in line with that view, even leading indicators as updated just a little bit ago.

For now I have to go with that, but in the back of my mind, I'm asking the question, WHY did we get the signal for a bounce today in the first place? Wall St. almost always has a reason and if I take the lazy way out, I say it's option expiration max pain was higher than yesterday's close and they needed to lift the market for that.

I have to leave it there until I find the smoking gun and I'm looking.

Not Changing the GDX December $25 Call position

The reason I split the GDX/GLD position in to two assets, but essentially the size and risk management of 1 position is because I felt there could be some rotation and GLD could act out on its own separate from GDX, despite the high level of correlation and to do so based on QE.

Higher GLD doesn't really seem to fit with possible tapering sooner than later and the NFP print today was the bridge toward that possibility.

However the bottom line as to why I'm leaving GDX intact and not adding to it is GLD simply has signals that are really standing out, GDX does not have the same type of signals today and I don't want to increase the position size here without a very objective reason why.

Adding to the GLD Dec. $126 Call

I'm still of the opinion as of now that this is more of a short term move, as far as the longer term pullback expected and whether we may be near the end of that, it needs more analysis and it would certainly need more time in a reversal process.

I may add to GDX too, but I need to look at that more closely and I'll get to that next.

There are some very fast moving positive divergences in GLD and it is very possible that today is a head fake/shakeout move.

 Gold 1 min futures, the divergence should be clear.

5 min futures, the same

And the 30 min trend, so there's enough support there to support the shorter term signals above.

GLD  1 min

GLD 2 min

I'll be back with GDX.

Ben Speaks at 3:30, John Williams at 4

Chairman Speech

Description Federal Reserve Chairman Ben Bernanke on panel at IMF discussing financial crisis panic, in Washington.

3:30 pm Description San Francisco Fed President John Williams speech on the economy and monetary policy in Los Angeles. 4:00 pm It appears to be regularly scheduled, I had the feeling it was impromptu.

Important Update

Yesterday I had very consistent data for a bounce which I expected today, the data was also consistent in how weak it was. In last night's post, Thursday's Wrap I made all of the data available for you to see. After today's NFP blowing away consensus on what was suppose to be a non-event, the market would not have liked that whatsoever because healthier employment data makes tapering more likely, but you saw what happened, first destruction, then a ramp.

This confirms that the data seen yesterday was real, it was based on something (a cycle, a bounce, maybe even an op-ex pin, but something real was behind the data) otherwise I doubt the market would be in the position it is in with such a stunning blowout of consensus.

I'm not posting them for now because it's too much time and I have a lot to look at, but I did look at the very same leading indicators that told me it was likely we'd be up today and they look EXACTLY the opposite as yesterday SO FAR, there's still plenty of room in the day and closing prints can be very different, plus after 2 pm or so on an op-ex Friday is when the pin starts to release and the market starts acting on its own with no other forces controlling where it goes.

So far, High Yield Credit is negative vs the SPX, Junk Credit is negative, HYG is negative (these were all positive intraday yesterday), Yields are in line and not really saying anything, the sentiment indicators that were positive yesterday are both negative today and commodities are in line.

So we have virtually the EXACT opposite today as we had yesterday.

I thought I saw somewhere earlier, maybe an email, that Bernie was to speak after the close today, if you have information on that I'd appreciate it. Some say he may make a compromise on interest rates that the market will like to offset the disappointment in earlier than expected QE tapering, now expected December, but they've been wrong almost every time.

If indeed Bernie is speaking AH today, I'd really like to know, I've looked through the news and don't see anything about it so if you know, please email me.

Other than that, the market starts to change right about now as most options contracts are closed out so I'll be paying attention.

CONTEXT is positive by +16, down from +30 earlier, I'm not sure where that's coming from, not credit, but I'll be looking.

I'm also going to make a run through assets and possible trades, but I really want to have a finger on the pulse of the signal we got yesterday and move today despite the NFP, there's something planned and executed and not even an NFP that was nearly DOUBLE consensus could stop it.

Market Update

So far there's nothing too out of the ordinary considering expectations for a minor cycle that may even be max-pain/op-ex related. The one thing I really should have done that I regret and I don't often have regrets or beat myself up over trades unless I did something that was questionable, is the GDX/GLD calls, I had a 10+% profit the next morning, I knew it was a very choppy market and things could change fast and I should have just taken those gains. Plan your trade, trade your plan- it was the first part I wasn't clear on and that's the reason I used options for the leverage in what was likely to be a short duration position. The second part is where I needed to be more deliberate, the point is to take HIGH PROBABILITY POSITIONS, if I was wavering on probabilities, it should have been closed gain or no gain.

I'm trying to get out as much as I can, but these charts move fast so I may have to add addendum charts for new moves, but so far as I said, not much surprising given expectations.

 DIA intraday positive at the lows like the Index futures oddly as many might think given the NFP print, but this was a cycle already prepared and once they have spent time and money getting a cycle ready, even a mini cycle, it rarely fails. Wall Street doesn't do anything without a reason. In my view, PCLN strength short term in to long term weakness such as I talked about yesterday as being a gift for short positions, seems to be the reason for this mini cycle unless it is op-ex related.

 IWM has what looks like an intraday relative negative divegrence, these aren't the strongest, but neither are intraday charts, again accumulation at the lows.

QQQ intraday not looking too hot. I looked at AAPL last night and I'd be nervous if I was long there, so I'll be looking closer today as it may be ready for a decent position.

 SPY intraday positive at the lows, the overall trend is in line with price action and intraday it's seeing a negative forming.

Index futures...

 ES in line so far, but getting a little Wedgey

NQ/NDX futures showing some intraday weakness, also check volume on all of these.

R2K Futures have a distinct negative divergence which may tilt the IWM chart to the negative.

 NYSE TICK, fairly mellow at -500/+750 with a couple of extremes

This is my custom TICK histogram, you can see the longer term trend of the larger cycle off 10/9 lows and intraday...

A clear transition from negative to positive, there may be some weakness starting there, I'll watch it.

 The Russell 3000 MSI (Most Shorted Index which is my own proprietary list) seeing a short squeeze vs the R3K.

Very short term VIX futures are starting to improve a little intraday, the longer term are still very positive.

And HYG as it is an asset used for manipulation...

Pretty much exactly what I'd expect considering the way things transpired, it looked like fear to hold even small amounts of HYG to manipulate/support the market and today that's evident in preice as it was VERY evident the last 2-days in 3C.

MCP Core Long Position Update

It's an amazing market if you are looking at the right place at the right time. So yesterday I put up some analysis of MCP in which I thought there may be an earnings leak because of the positive action...

Earlier action got me to start a partial, phased in entry with conditions laid out that if we get a head fake move, I'd addd the rest of the position, that head fake move started the very next day and culminated yesterday before earnings came out.

Earnings missed, but our signals seem to have been right on as MCP is up 3.78% today right now.

There is such thing as a Wall Street "Whisper Number" and that is not the consensus of earnings expectations, that's a number Wall Street is looking for and often far removed from consensus and if the Whisper number is beat, even though consensus is not, we see action like today, but ultimately all Wall Street really cares about is their PERCEPTION of what they expect from the asset, nothing else matters in the end, it's all perception.

However the After Hours earnings trade was very interesting and 3C caught it which I published at the bottom of last night's wrap .

 MCP 3C chart after hours, the dip to the low of $4.50 in AH was accumulated as can be seen. 

After hours trade was the very reason we developed 3C for the TOS platform initially.


If I'm correct I believe PCLN beat on revenue and EPS, but had the worst of earnings reports and gave guidance that was below consensus. Ultimately this is all the market cares about, what you did last quarter is done, there may be information in the report like for instance how AAPL's I-Phone 5 sales are trending, but Guidance is the most important because even if you blew away estimates on earnings, if guidance is below consensus, the asset may actually be in a situation in which it has peaked and now with lower guidance it is OVER-VALUED and perception is, "THIS LAST QUARTER IS AS GOOD AS IT GETS".

So, PCLN did the same thing in AH earnings, a strong 3C positive divegrence at the lows of $945.19!!!! BELOW $1,000!!!!

I posted yesterday about PCLN and showed some very negative action at the high probability longer term "Trend " indications, but also thought that PCLN would bounce even with those earnings and give us an opportunity for those interested to start a new core short and for those already in PCLN short, to add to their position at a more favorable/lower risk area.

PCLN ended up only closing AH 10 points below the regular hours close and MCP CLOSED AH RIGHT AT THE REGULAR HOURS CLOSE!!!!

MCP charts now...

 The larger trend of the Ascending Triangle Base with the break down out of the triangle, this area and the previous reaction low that came right after a head fake move above resistance (yellow box to the left) which sent MCP down to lower levels, where the two main accumulation area.

*It's important to remember that my experience in almost all cases is "Wherever accumulation first starts (even though it usually continues in to lower prices to make for an average accumulated position somewhere in between) the price move, once it begins, will ALMOST ALWAYS SURPASS THE FIRST AREA OF ACCUMULATION NO MATTER HOW MUCH HIGHER IT WAS AND QUITE OFTEN, PRICE BLOWS WAY PAST THAT.

That would mean we'd expect MCP to at least pass the $6.25 area. If we use the "measured move", then we'd expect MCP to eventually make an upside move of $11.10 (the measured move is the range of $7.90 to $4.70=$3.20 and $3.20 added to the top of the range at $7.90 = a measured move target of $11.10).

 The head fake levels, after the fall out of the triangle where the largest accumulation zone was to be found, we had a range broken on the downside by a GS sell rec'd which means GS was buying (orange) and then a break of first obvious support around $4.90 and a break of final yearly support at $4,70 which happened yesterday on 3C positive divergences suggesting the volume and lower prices were used (size or supply and lower prices are two of the main reasons for a head fake move and another is we see them right before a reversal as any shorts would be squeezed or new longs would create demand as MCP acts better than the crowd expects, so momentum is a big reason for a head fake move just before a reversal.

Also note the ATR increasing dramatically on the move up from $0.039 to $0.1190 (white indicator at the bottom)

 The head fake levels taken out in yellow, in orange what looks like a capitulation event intraday and it is close if not the low of the day, then the point of a head fake move in white as new shorts are squeezed and new longs jump in, volume is up, this is one of the other main reasons for a head fake move.

Please see my two articles always linked on the member's site, "Understanding the Head Fake Move".

 We also have two recent buy signals in my Custom Buy/Sell DeMark inspired indicator.

 This was 3C's leading positive on the head fake move below $4.70 yesterday as of the 4 p.m. close.

This is a larger view of several head fake moves including the Goldman Sachs Sell Rec'd, note the 3C divergence even stronger as it seems GS was using the sell rec'd to create supply on the cheap which they were likely buying, someone was.

So far MCP looks great, AH trade looked great considering the report, volume looks great thus far. Remember this is meant to be a Core long position or a "Trend Trade", so I'd give it some time unless you are using it strictly as a trading position, I think we'll see some nice action in the near future.

What is a "Mini Cycle"

Since using that term to describe what I expected today I've had a lot of emails about "What does a mini-cycle look like?". Amazingly despite the NFP, we are getting exactly that and that is not surprising because even though they were consistently weak, they were consistent signals among many assets and indicators as mentioned already.

This is one email reply that I'm basically copy and pasting to try to explain this term "Mini cycle" a little more clearly...

"A mini bounce or cycle is obviously subjective, but I would consider the 10/9 lows and bounce from there to be a full cycle, a mini cycle might look something like a falling 3 methods candlestick pattern, maybe even shorter.

There's a VERY good chance, because the signals were so consistent, but also so consistently weak that it is just a bounce to get prices up to an area where the can effect a Max Pain Options Expiration as we have those every Friday now with so many weekly options, not just the 3rd Friday of the month.

So in effect, we may have dropped too far yesterday from "max pain" which is the level where they are causing the most number of contracts or rather the highest dollar number of contracts, to expire worthless so those who write them, the professionals,  can keep all the premium rather than lose it or have to deliver. So a mini cycle could also just be a 1-day event meant to get prices to the Max Pain pin level where the most amount of contracts in dollar value will expire worthless.

Obviously we'll be able to tell more as the day goes on, an op-ex Friday usually is pretty range-bound around whatever the max pain pin is, which shifts as contracts are closed, but usually around 2-3 p.m. most contracts are closed and the market starts to act whichever way it wants in to the close.

I've found that the price action during this time has little relevance on the next week's open, but the 3C signals often pick up the next trading day right where they left off on Friday or the day before."

Super Cyclone, Super Jobs Report, Or...???

My heart goes out to the people of the Philippines as this Super-Typhoon, the same as a Cat. 5 Hurricane in the US like 1991's Andrew that hit Miami (only Andrew was much, much smaller) slams the Philippines.

This Sat photo shows the Super-Typhoon.

I live in South Florida so I've been through at least a half dozen direct strikes and even a cat. 1 (while not very dangerous, we use to hang on to the pilings of the fishing pier and let the waves slam in to us and see who could hold on longest... bright idea huh?)  can do enourmous damage with huge costs even in an area that has a building code that is meant to withstand storms a lot stronger. I was about 50 miles from Andrew's land fall and hoonestly it was about a 30 mile an hour breeze because Andrew was so small in size, however it packed incredible winds. My father was a General Contractor and was working down there and saw re-inforced concrete bunkers for the Air-Force reduced to rubble. Apparently at that same facility they clocked sustained winds at 230 mph, which no news organization ever reported. There were also thousands of migrant workers who live in what can only be called "Shanty's" on the edge of the Everglades working the fields in the area who lost their lives. Early on my father was told by sources in the Florida National Guard that they had recovered over 5,000 bodies very early in the effort and almost 9,000 mobile homes were wiped off the map, so no one ever hear the true death toll, just official numbers usually around 19 to 24 people.

This storm is clocked at 195 sustained and 235 gusts, I can tell you they are a lot higher than that with 195 sustained, that's like a huge tornado hitting, not a hurricane and this thing is HUGE. I hope we all can take a moment to send some prayers and positive thoughts their way and maybe some logistical/food/batteries/flashlights/blankets/water or donations afterward, we needed it in sunny Boca Raton, I can't tell you how badly the Philippines will need it.

OK SO THE PUNDITS WERE WRONG AGAIN. The Non-Farm payrolls came in at +204k which is quite a bit above consensus of 120k. Goldman said 100k and JPM 75k.

This is what happened to ES...

ES had gone from 1744.75 at 4 p.m. yesterday down to 1736.50 on the NFP and opened amazingly right around $1744, just about where the 4 p.m. print left off yesterday, coincidence?

By looking at the chart above it looks to me the NFP was either leaked which the BLS has admitted, has been  leaked enough times that this is why they are building a new media center to prevent leaks. Or perhaps the mini cycle I gave good evidence of last night... and yesterday across 3C, Leading Indicators, sentiment, Dominant Price/Volume Relationships and many other signals was just not going to be derailed.

Gold so far is acting as if the market expects a Taper in QE soon, but, I think the short term cycles will change that.

 Gold is down after the NFP, which is associated with the market thinking QE will end sooner than later as gold is a QE sensitive asset, so it the $USD...

The $USD is up which is also acting as if QE will end soon, but you see the small negative divergence.

The truth is to understand what the market is truly thinking, I need to post several charts of each asset because right now we are seeing short term signals that I believe are a part of the mini cycle I mentioned yesterday and last night I gave good indications across many assets and indicators.

Treasuries also are knee jerking, but should see a change soon. There's controversy from Nanex that is showing oddities just before or milliseconds after the report in both gold and Treasuries as the bond market was halted for 5 seconds immediately after, the largest, most liquid bond market in the world, we'll leave that for NANEX to figure out, we have our own strange information.

The 30 year 1 min dropped instantly and there's a clear 3C negative divergence before the NFP. However this too is building an intraday positive so I would not be surprised to see a change, AGAIN, SPECIFIC ANALYSIS OF EACH ASSET (QE SENSITIVE) IS NEEDED TO SEE HOW THE MARKET IS TRULY REACTING.

The official consensus for the NFP was 120k, with Goldman and JPM coming in even lighter and the Unemployment rate to rise from 7.2 to 7.3.

The UE rate came in at consensus, but the NFP added nearly double most estimates at +204 gain, however this is not without controversy and thus it's important to look very closely at QE related assets to see what is truly going on after this print that WAS SUPPOSE TO BE A NON-EVENT!!!

Among the inconsistencies in the report, the Household Survey came in at 213k which isn't far from the  Headline print of +204k, but... it seems when breaking down the components of the same Household survey, 623k full time jobs were lost in October which works to offset the total 691k gain. Part time jobs did not take up the slack in the Household Survey as they saw a print of -127k for a loss of 750k.

I'm sure the Labor Force participation rate explains the inconsistencies in what seems to be a goal - sought print.

According to the Labor Force Participation Rate, 9932,000 Americans dropped out of the labor force in OCTOBER from 63.2% to 62.8%! This would be a 35 year low not seen since 1978. Data shows the nearly 1 million people dropping OUT of the labor force in October ALONE is the 3rd highest drop in the history of the US.

Again, all I can say is it seems the data was what we call, being "Goal seeked or goal sought", I think there's a clear reason for that that and we may have time to get in to later, but it has to do with the DANGER the F_E_D's balance sheet is in, remember they are a FOR PROFIT Corporation with shareholders they report to.

More coming, but first there's a lot to deal with in the market.

Wrong, Wrong Again or?

I have some more markets to show you, but this is interesting given yesterday's analysis that was refined last night...

 ES dropped a bit overnight, but on the Taper Off Jobs report, look at the positive divergence snapping up the shares at the lows.

NQ had the exact same type signal...

TF was similar, not exact though...

A Leak in BLS, could it be?

I think the market had just already set up a mini cycle covered in depth in Thursday's Wrap and it wasn't going to be thrown off so quickly.