Market Update

So far this morning price has been consistent with the intraday 3C signals, especially clear on Index futures, but as I said, there's still solid evidence for the move that was first uncovered yesterday, but yet to really materialize.

I'm assuming that the action thus far this morning is more pin related, as we get closer to 2 pm though the market becomes better able to act on its own as contracts are mostly cleaned up by then.

Some of the hints include HYG holding yesterday's gains in a consolidation. VXX gap fill behavior this morning, but that's all it looks like so the arbitrage effect can vert easily and very quickly be put in to play with downside in VXX and upside in HYG, I'm not even counting TLT at the moment.

Charts are also largely consistent with the general tone I've briefly summarized above, take a look as they show it better than I can say it.

 NYSE intraday TICK Index, the channel for TICK activity is very much in line with market activity, I think it's likely op-ex max-pain related.


 SPY 5 min TICK chart shows a wider trend of that negative channel above trailing off.

TICK 1 min, this is where I think the TICK will be heading shortly which will start to change the price trend intraday, this is all intraday/short term based on yesterday's findings and positioning.

SPY 5 min shows a loss of downside momentum which is also reflected in my custom SPY/TICK indicator above.

When volume increases in this situation, it means we are most likely moving toward a reversal in this case, intraday.

The IWM is probably the clearest example of what I think is happening and what should happen.

IWM 1 min has been negative this morning like the general trend in the market, again likely more based on op-ex pins than anything, what is useful to note is that there doesn't seem to be any intraday accumulation of lower prices in the averages, which means that it doesn't appear to be a widening base, adding on to yesterday which means the op-ex theory is more plausible.

IWM 2 min however is still in position from yesterday''s activity and I think the signals given yesterday are still on deck.

IWM 5 min, be sure to compare the IWM's signals to ES 1-5 min below.

IWM 5 min expanded view is to show that while there is that short term divergence and rounding /reversal process from yesterday, that it is within a larger negative positioning of 3C, viewed through the lense of multiple timeframe analysis that would be taken as a smaller move to the upside as expected yesterday, but it is capped as the larger theme is deterioration. This would mean that the market is acting pretty normally, more so than say the last 4 years which may be a reflection of what of the market believing the Bernanke Put has effectively been removed and as speculated and probably proven last week smart money views tapering as a tightening policy tool which is very different than how retail would view it and it's likely very different than the way Bernanke would like to have it viewed, THIS IS WHY I BELIEVE THE 10-YEAR YEILD HAS BEEN BOUNCING BACK AND FORTH ABOVE THE KEY 3% LEVEL.

VXX 1 min shows the same activity, remember it trades opposite the market so weak intraday market average downside activity and divergences are confirmed with weak VXX gap fill activity and divergences.

VXX 2 min still in line, it may not be for long

 VXX 3 min gives a glimpse of the short term weakness, which is equal/opposite to the market.

VXX 30 min of course is a totally different story, there's a massive reach for protection and what we see in yesterday's activity is really minutia in a way, but if we can use it, it's worth following, however this is where the trend probabilities lay.

HYG 2 min as I said is in place still in a bull-flag-ish position, largely in line or a holding pattern, waiting to be called upon to activate the SPY arbitrage which is likely simply on hold as op-ex plays out as there's a lot of money even in the weekly premiums so Wall St. wants those to expire worthless and get to keep the premium, this is why I ALWAYS try to get out of options as quickly as possible, the longer you hang around and more you use them, the greater the probabilities are that the "House" wins, just like Las Vegas, options are set up right from the get-go with the premiums to put you at an instant disadvantage, the longer you wait around, the more the odds shift in Wall St.'s favor.

HYG 5 min however also shows that there's no larger divergence there, there's no real risk on move there, it looks very utilitarian, useful for a cause, not an expression of shifting sentiment.

ES intraday 1 min shows the trouble mentioned earlier, very much in line with price activity, one again note that the lower prices HAVE NOT been accumulated, the importance here is distinguishing the difference between a base being widened out with a larger footprint for a stronger move and what is very likely a reflection of op-ex activity.

ES 5 min is one of the reasons I believe we are still on track with yesterday's divergence/set up, which is more tactical than anything as far as its usefulness.

Since starting this post, TICK has started moving the way I thought it would as we move closer to the 2 pm hour.

Current TICK.

To sum up, I think yesterday's divergence/set-up which is small and short term in nature is still in play, it has just been interrupted by op-ex pin activity and that should fade off more and more in the coming hour or so.

Also I don't have any evidence to suggest that this morning's lower prices in many asset have been accumulated to form a larger basing process.

I'm going to check around and see if there's anything management wise that needs to be done and if there's anything trade wise that may be of interest.