Changes...

After really outperforming the correlation that has existed between USD/JPY and ES since November of 2011 on the February run, I've noticed at least 3 times over the last week ES and other Index Futures' weakness in underperforming the Carry Cross (carry trade) correlation, this morning and since last night's futures open is just the latest example even though I still estimate that ES is still about 70 points rich to the overall correlation due to the short squeeze in February after a bear trap was set during the Jan 27th-Feb. 6th accumulation period, a true head fake move and the Feb. rally was the result, one example that will definitely be in my 3rd article in the series, "Understanding the Head-Fake Move: Examples".

 This is the USD/JPY in red and green price bars vs ES in purple on a 1 min chart overnight and through this morning...you can see the clear underperformance this morning since about 7:30 a.m.

This is the opening of the new week to the right on a 5 min chart in which ES is also underperforming, it's a bit more in line with AUD/JPY, but that carry trade seemed to be hit the hardest on last night's futures open and just before on the FX market's open.

The point? Regardless of the short term "Pick-up where you left off" 3C concept, "Changes in character lead to changes in trend", and just what has the trend been? As I showed Friday afternoon, over the last two weeks the example average, NDX-100 had lost .32% over the last 2 weeks, I'd call that a lateral trend which is certainly a change in trend form the February rally, what usually comes next, well that's what I was mentioning late Friday after going through the 3C signals, whether a short cycle of a week or one of 2 months, we'd be at stage 3, stage 4 or DECLINE comes next.

The market is not as hard to predict as you might think if you know where you are in a cycle.