Market Update

You remember what I said Friday about price doing what it wants, but 3C signals will usually pick up right where they left off, even over a 3-day weekend and I say this every Friday, well we'll see those in a minute and once again, they are fulfilling that concept.

It looks like that reversal process built up overnight is in the process of starting to reverse to the upside in the Yen. There's always the chance that it becomes a wider "W" footprint and it's early and you know how I feel about a.m. as far as analysis, but the USD/JPY stayed below an important technical level and since last night's post the market stayed largely lateral whether the Yen, the USD/JPY or the Index futures.

 Last night I expected the 1 min positive divergences in the Yen that were just starting as lateral movement (reversal process) was just getting underway to migrate to the 5 min chart showing us a much stronger signal, indicating that the low levels in the Yen were likely being used to close carry trades, in this sense it's kind of like being short, the lower the Yen when you close the carry, the better position you are in.

The base widened out and so far is now breaking out, although it could make a wider "W" as mentioned above, but it is proportional as of now.


 The Yen upside is causing USD/JPY downside which is effecting the Index futur

ES 1 min right now has an intraday negative divegrence, but this is not the most important signal and as I said above, we are still very early and still a.m. trade with a lot of games usually being played in the morning.

As far as picking up where we left off with 3C signals...

 The SPY 1 min not only did not confirm the gap up, but continues the negative signal, pulling price lower right where we left off at Friday's close even over a 3-day weekend.


 The 2 min chart is stronger as a signal and is worse so as I was saying last night, I don't think the initial knee jerk to the Chinese liquidity will hold long, especially as people start wondering why such a large operation just before the Lunar New Year.

 IWM 1 min did not confirm the gap on the open and is pulling the IWM down.

The same with the Q's. It just seems the Yen was waiting for the US open before making any moves which is probably about right as far as proportionality is concerned.

I'm going to buzz through some other assets and see what's happening.