Daily Wrap

Today was more evidence that there seems to be a concerted effort to keep the market within a range, to be more specific, to support the market to keep it in that range. Today's closing prices (all averages closed red by a fraction) were exactly in line with yesterday's Dominant Price/Volume relationship, Price Up/ Volume Down which is usually a short term overbought condition and the most bearish of the 4 relationships with the market usually closing lower the next day, but it remained pretty much in the range.

We saw very early today the USD/JPY test right down to $102 as the market opened, 10 minutes before that the Index futures that had sunk lower all night had been ramped up just enough to produce an open exactly at yesterday's close until the USD/JPY losses and test of $102 that caused a lower open.

USD/JPY (candlesticks) vs ES (purple), you can see clear intervention defending $102 and Index futures / ES.

Today's pattern was similar to yesterday, I suppose you could call it a pump and dump...

SPY 1 min chart of yesterday and today's pump and dump.

HYG was used as a lever of support again today and again TLT saw a flight to safety and Yields are severely disconnected acting as a magnet that is going eventually (I think shortly) pull the market down toward them.

 Longer term Leading Indications using TLT (light blue) vs the SPX (green), right now there's a flight to quality TLT has acted as a leading indicator which is now suggesting a move to the downside in equities.

 Yields also fell more today, they act like a magnet for the averages.

Here's the extent of the dislocation, it's quite severe.

I don't think the pump and dump is over yet, but we know what they are doing, the same thing we are doing and before it becomes obvious to the retail crowd they'll be done...

 This late day positive divegrence in the QQQ tells me they aren't done with this pump and dump pattern yet, but there's serious damage done so I don't think there's too much time left...


Damage...

 60 min SPY

60 min IWM

30 min QQQ

I say use it while you can, it looks pretty clear from the charts above and this morning's test of $102 that we aren't going to be up here too much longer (also note the near perfect rounding top.

The Dominant P/V relationship today was close Down / Volume down which has the least influence, but it is the hall mark of a bear market or the relationship most often seen during a bear market.

I'll check on futures later and see if anything has changed, at this point I think they'll try to pump and dump one more day from what I see which is what my opinion was earlier today, however after seeing how quickly USD/JPY fell to $102, I wouldn't be surprised if the market just takes over to the downside, that was a pretty violent move in premarket today.