Market Update

Today is one of the stranger days I've seen. As far as expectations on Thursday afternoon for the new week, we are on track, it's just the way they are happening are odd, I think this has to be due to the low equity market volume. Instead of seeing normal migration of a divergence, we are seeing some strange negatives in some heavier timeframes than I'd normally expect, that would fit with selling/distribution in a low volume environment.

Right now I'm sticking with the VXX calls and SRTY long, although if I had to choose an asset today, I might choose SQQQ (3x short Q's) or a QQQ put.

Leading Indicators are off today as well as would be expected from what we were seeing late Thursday and expectations for early this week.

Here are some examples (however for now, I'm going to hold positioning unless I see something that's really screaming or jumping off the charts).

*With central bank interference fading, I'm reminded of the market maxim, "Stocks need volume to rise, but they will fall of their own weight", meaning they'll fall on light volume.

 SPY 1 min intraday seems to be inline, but...

 The 3 min chart continues to be in bad shape, however this isn't even what I was referring to above.

 My custom NYSE TICK Indicator looks like it's tracking volume, it's tracking TICK data, more and more stocks are selling off or falling than rising over the last 3 days.

And specifically today...

Meanwhile the actual NYSE Tick data is about as flat as you get in a very moderate range of +/-750

This is the QQQ 1 min intraday, NOT in line

QQQ 3 min negative

The 5 min is kind of interesting as it is moving somewhat inline intraday, but from a leading negative position as if some larger orders (sell) are skewing things in the low volume environment.

At 10 min it is very evident on the Q's, this is why I said I'd likely chose a QQQ short for a pullback trade, but something else bigger may be brewing here.

 Look at the leading negative on this QQQ 15 min, that's pretty far out there for such a fast move.

IWM intraday so I'm not unhappy with the SRTY long from Thursday

3 min IWM

And even the 10 min IWM is starting to go negative, but not the normal migration/divergence pattern, just like block orders are skewing the signals. Also note the reversal process.

 As for short term VIX futures, this is the intraday action, you'd never think it looking at price alone and the VIX is where the volume is vs the broad market today.


3 min leading positive short term VIX futures

And look at this oddball 15 min positive....

The intraday real VIX futures are positive today as well.

The USD/JPY 5 min is still giving a very ugly signal.

And the $USDX intraday is still giving a very ugly signal, it makes me wonder how long the USD/JPY can hold up.

As for Leading Indicators, High Yield Corp. Credit (HYG) is diverging BADLY with the SPX, no support coming from there.

Both sentiment (pro) indicators are selling off badly vs the SPX, either 2 days or the other is at 3+ days.

Yields are disconnecting to the downside, they act as a magnet and pull equity prices toward them and commodities are also disconnecting with the SPX to the downside.

It's a strange day, I'm going to keep the positions for a pullback in place, but wait before I add, although if I do, it may be in a QQQ put.

I have a few more assets/currencies to look at, but this low volume is really making this an odd looking day.