Market Update

I had just been talking with a member who has picked up 3C very quickly, much faster than I originally did, but I had to unlearn years of Technical Analysis dogma and look at the market without that bias hanging over me.

We both agreed we were seeing the same things and I had written,

"3C works really well because hedge funds and others all herd together, they buy the same assets, sell the same, the reason being is because no one wants to underperform the herd, if they strike out on their own (generally speaking) and try to do the best they can for their clients and fail and have a year that is below the average of the herd (even if that average is worse than the SPX's yearly return-I think the average fund performance for 2013 was 6%), then they (the fund managers) run the risk of losing a multi-million - or more job.

Point being, that is one of the reasons 3C works well. When I see stuff like this, I assume there's fracturing of the herd, panic and an every man for himself attitude, thus things go in all different directions." (And correlations are lost).

What I see in to the closing hour is starting to make more sense. The negatives are becoming more defined. One of the most important assets I've been watching in this situation is the VIX futures, earlier in the week they were very active, today we saw some activity, but they were missing the normal multiple timeframe confirmation. During this last hour multiple timeframes that had been out of sync have moved or have at least put in initial string moves, this is probably one of the best or most observations I've seen since we expected the move up early this week.

Tomorrow we do have Non-Farm Payrolls which I think are going to be interesting (weather?), but they should give us a window in to smart money's thinking, not that they haven't already made much of that clear, but their thinking since the minutes.

I'm going to follow up next with USO, finally some signals that are either actionable or VERY close to being actionable.