Daily Wrap...The Crazy Ivan

Yesterday in this article Remember the Steering Divergences? I posted this chart with some excerpts...

"There are two scenarios, a normal straight head fake and a Crazy Ivan , "B" would be the normal head fake move which is a broad and general term, the specific head fake created here would be a bull trap just as the one that proceeded this monster rally was a bear trap which I will show you.

"A" is a variation on the head fake move called a Crazy Ivan shakeout which gives the head fake on the upside a little more momentum by running stops below the triangle and engaging some shorts before moving up and forcing the shorts to cover and those who were stopped out to buy back in creating stronger upside momentum, but the entire point is "C", to get above the triangle where retail will buy on "Breakout confirmation" or chasing.

Stops will usually be placed just inside the triangle, at the apex (point) of the triangle or just below or below the lower trendline of the triangle. As price rolls over and engages those stops it creates downside momentum the same way a bear trap creates upside momentum through a short squeeze, at some point on the way down shorts enter creating more momentum just as in the last move up longs enter creating more momentum, it's the EXACT SAME CONCEPT, JUST IN REVERSE."

That's exactly what was posted yesterday, when I said," a Crazy Ivan shakeout which gives the head fake on the upside a little more momentum by running stops below the triangle and engaging some shorts before moving up and forcing the shorts to cover and those who were stopped out to buy back in creating stronger upside momentum,"we actually saw that today , not only with the break below which looks like a failed bullish triangle, but as I mentioned several time today, there was a near perfect little bear flag created...

From today's SPY Triangle Update...

"however what is impressive is how cleanly it is bear flagging along the triangle's resistance trendline."

Again as a reminder, you have a bullish (as far as Technical Analysis rules go) continuation triangle, and as laid out yesterday, " a Crazy Ivan shakeout which gives the head fake on the upside a little more momentum by running stops below the triangle and engaging some shorts before moving up"

There is of course more to the entire scenario if you read the entire excerpt, what I did find strange was the schedule the market seemed to be on to get this done today, for instance...

 Even on the day it looks a bit odd, the last 10 minutes...

Take a closer look...

 This is a 1 min chart, that just does not look natural by any means, I can almost hear, "OK, Ten minutes to get this done, get moving!!!".

And while the EOD volume appears to be large, it's nothing special at all, take a look...

This is most of 2014.

I figured we were so close they'd hit that level, but I expected some more excitement, this seemed like a real job.

I don't know what the time schedule was about, perhaps it had something to do with the USD/JPY...

 The USD/JPY and ES were perfectly in sync all night and in to pre-market as seen above (FX is green and red and ES in purple), however that all halted as the USD/JPY would move no further.

 The Carry Funding Pair broke $102 and was promptly rescued along with Index futures, but the support that HAD held this week at $102.20 is now solid resistance and $102 is just below, with the USD/JPY breaking $102 perhaps it was imperative to get the SPX new high done before the overnight session sets in and who knows what happens to the pair.

To get the job done they did break out what they needed to or were able to, such as HYG...

 HYG obviously pumped the last 5 minutes and one of the other SPY Arbitrage assets, VXX (TLT was unavailable)...

VXX was smashed lower the last 5 mins, taken with HYG that creates a positive SPY arbitrage to move the market up, so it seems this didn't come naturally at all, it was worked for and they used every trick they had available those last 5 minutes.

Still what we have left on a daily chart...

Still looks very much like a mature reversal process (as opposed to a "V" shaped event) as the tops are broader than the tighter bottom reversals. Of course all of this was on no economic or fundamental data, this is why I think the Crazy Ivan and triangle showed up when they did.

As shown earlier, sentiment hasn't bought this week (pro)...

In fact it's headed the opposite direction, just as TLT and the safe haven assets in bonds were headed the opposite direction to what you'd normally expect, sending Yields (one of my favorite leading indicators) lower yet, which are already severely dislocated fro the run that started Feb 7th, but was pout together starting January 27th.

Also seen earlier in Leading indicators other than TLT outperforming the SPX correlation, VXX (short term VIX futures) were outperforming as well.

 TLT gives a reversal (leading signal) at the top and then underperforms the inverted SPX correlation until the last week in which it outperforms as a flight to safety apparently and in some size.

VXX (VIX short term futures) are also seen outperforming recently. It seems they are bid for protection, but from what we just made an all time new high right?

Tonight's Dominant Price Volume Relationship was among all 4 major averages, 14 of the Dow 30, 55 of the NDX-100, 618 of the R2K and 220 of the S&P 500, the relationship was Close Up/Volume Down which is the most bearish of the 4 possible combinations and usually acts as a 1-day overbought condition with the next day closing lower.

We do have an op-ex Friday to contend with tomorrow.

As for futures, I don't put a lot of faith in 1 min charts overnight for Index futures, but I thought I'd show them just because a couple of them are so extreme and maybe check up on them a bit later.

 ES is showing a VERY sharp leading negative divegrence, it's one of the sharpest, but it also had the most work to get done today.

It will be interesting to see if these amount to anything.

 NQ is more just in leading negative position, not that extreme, but...

TF, Russell 2000 futures are seeing just as extreme a leading negative divegrence as ES, I'm pretty sure it's going to move futures, the question is, "Is it the start of something bigger?" USually on an overnight basis I wouldn't give it much thought, but after seeing the struggle the last 10 minutes, the apparent time table and now these, I'm wondering.

I'll check in in a bit if Futures are looking interesting.