Daily Wrap

Well it was another Putin is being a good boy morning followed by Putin being who Putin is, just last time it took the market a bit to figure that out.

I'm glad we closed the SCO (2x short oil) today as it got hammered as did GLD and GDX.

The market bought Putin's lack of aggressiveness and plead that he doesn't want conflict with the West or in the East, that doesn't mean he won't proceed with it as today was one of the bigger escalation days, first blood drawn by troops, 3 deaths and at least two injuries between troops, not protestors so listen to what he says or what you see with your lying eyes?

I closed the calls as I felt things were falling apart in the market a bit faster than expected (3C) in fact even the market move higher seemed to be to move VXX to the level that was pre-ordained to be the accumulation level, but accumulation started there almost immediately on the first day down, rare.

Here's what the SPX looked like, some other averages and Index futures were worse.

 SPY 5 min intraday losing a lot of steam, the same chart in perspective...

5 min SPY, that's trouble if a move that we were ready for Friday can't even make it to the 5 min chart.

Today the AUD/JPY pushed the market until late morning...

AUD/JPY 1 min vs ES, after that it was VIX hammering, but the VXX was being accumulated during all of that.

We've known for a week what was going to push the market, HYG as a lever and it has tick for tick...

 While the same 10 min positive is still in place, the deterioration that started through today is making its way through longer timeframes...

This is the 3 min intraday, when this hits 5 min, we may be seeing VXX putting in a reversal process.

Speaking of...

This is the VXX 5 min chart, as soon as it started dropping it started accumulating so I think we were right on that this move is less about the market and a head fake move and more about the VXX which trades opposite the market so of course it can easily look like it's about the market, but this is what we have been waiting for for over a week, this move down in VXX and the accumulation, next the reversal process.

As for Leading Indicators, no change through the day except VIX was bid going in to the close which is likely F_O_M_C day tomorrow, don't forget about the 2 pm policy announcement and the F_E_D knee jerk reaction, I tried to hold out for it today with the calls, but decided to take the double digit gains and see how things went.

The knee jerk move is almost ALWAYS there on F_E_D related events, it's also almost always wrong, usually lasting a day or two before reversing.

HYG was in line as mentioned with the SPX in Leading Indicators, sentiment indicators were in line like earlier today, I mentioned Yields dislocated negatively, it's not a huge dislocation yet, but this isn't a huge move either.

The one LI that wasn't biting was HY Credit, not the lever HYG, but pure Risk On High Yield Credit so this move isn't believed in by the pros, but we never expected  that, we expected a move(Remember all the re-positioning especially Friday last week) and a move for a reason, VXX.

As for Dominant Price Volume Relationships, we had one across the board and DOMINANT, Price Up/ Volume Down despite today having higher volume than yesterday's pathetic volume (remember these are the component stocks of an average being measured).

This is the most bearish of the 4 relations and it was over half in most of the averages, typically it acts as a 1 day overbought condition and we have a close lower the next day, it will be interesting with the F_O_M_C at 2 p.m. and the knee jerk reaction.

I'll check futures later tonight, but so far the move is proceeding as expected, just it was expected to start last week, other than that, I don't see any surprises, VXX or VIX futures as far as I can tell are the key and they are acting like it.