Market Update

The USD/JPY is just meandering lower in waves. I see TF intraday is getting like the NQ chart I posted so I think that's significant on an intraday basis and intraday at this point is getting to be significant on the next trend.

The Q's for example intraday (please pay attention to the 3C signals in the flat areas of intraday trade today, where we usually see the most underlying activity)...

 QQQ 1 min- this is further deterioration from last week, Friday's post specifically , note the leading negative in the flattish range.

The 2 min

 And the 3 min specifically today.the long term trend for this chart is worse than what you see here, I'm just trying to scale last Friday with today so you see the continued deterioration.

As for the NYSE TICK, I was going to try to draw the trends for today, but I think it's more effective just to define the borders and let you see them yourself.

The initial thought about the (mostly) 30 min charts that held a positive divegrence, was that they'd last long enough to break through the 200-day SPX on the downside and stage another head fake, but these are even worse, this is it, this was the move and they are falling apart even more.

 I show the 30 min SPY in it's truer scale to show that even though the 30 min chart did have a strong positive divegrence which was a for this head fake based move, it still was weak in the Primary picture of things so I think the next stop is...

I think there's very little doubt our next stop is the 200-day, but I think to be effective initially there will have to be a break below as sentiment will be bearish before we get there and a break under the 200 is what retail will chase, we'll have to see what short term signals show at the time, I suspect some kind of game will be played as you know.

The overall pattern is interesting too, it's a cleaved H&S that's already run a volatility shakeout before a right shoulder/s were formed, that's why I was talking about the Dow 1929 parallel chart floating around and making the point, these two markets aren't the same, I am not saying they won't be similar, I'm saying go with the data we have as we get it rather than assume it will look like 1929.

I'm just getting a feel for trade as we are in a new week and the BOJ action "had" the potential to mix things up a bit, even though their intervention and policy has had a very limited effect on the market in the recent past. I think the bigger fear that will be taken away from their action after the initial knee jerk which looks to be done in the carry cross, is a liquidity fear, this is a lot more like 2008 than I think many notice, there are liquidity problems popping up everywhere like pipes springing small, but constant leaks.

I'm not sure what the PBoC is doing, maybe fine tuning after 8 months of suspending liquidity soaking up operations they are at it again just after they had to put liquidity out there with Trust failures looming. Perhaps they are fine tuning policy or testing the market's reaction, but ultimately they don't want the liquidity out there, they needed it to save some banks/trusts from failing. Perhaps mission accomplished and they resume soaking up yuan, we'l see at Thursday's regularly scheduled operation (Tuesdays and Thursdays).

As for the market right now, intraday is deteriorating, I want to make sure and as I said Friday, at this point I'm a bit more interested in longer term trend positions than trading positions, when we are in chop than trading, but I think soon we will be moving or already are moving in to stage 4 so that would mean this is probably one of the last, best chances we get for short positions at excellent entries and lower risk, I don't want to chase anything down.

Oh, one last thing, I just want to point out the excerpt in Friday's EOD post from Tuesday February 4th trying to anchor expectations for what was coming based on a head fake move, the market was still ugly as of Tuesday Feb 4th, but we had been tracking a head fake move (up) for almost 2 weeks at that point.

This is Tuesday Feb 4th on a SPY daily chart, I had been writing about this for several days in to late January as far as what to expect from a head fake move, remember they have to be convincing, but the pendulum swings both ways, that's how moving sentiment works.


*Note the last sentence or so especially.

"Tuesday February 4th

" When I said we expected a head fake move in my Friday post, "Come Monday", it was a head fake move to the downside, they need to be real, they need to be convincing, just as a bounce to the upside, I wouldn't expect a 1 or 2% move, I'd expect something that will fill my inbox with emails asking, "Are you sure the market is still bearish Brandt, this looks awfully bullish"."