Market Update

I'm going to make this quick, I'm not going through how the Carry Trade Correlated Algos were shut off today, but on any upside you bet they'll be right back on. I'm not going through the "W" shape that we are holding out for and the signals that we have suggesting that, I'm really not going in to the VERY strange antics of Goldman in which they first turn their back on HFT, then they put their NYSE Designated Market Maker status up for sale and now, talk of them closing their Dark Pool Sigma X-SOMETHING BIG is going on, my best guess on short notice is there's so much damage in this market they're essentially in some way going to have to walk away from it and start from scratch at some point and Goldman seems to know what scratch is. This is exactly what I have maintained for years, "There's going to be a new market, a very ugly one and whoever has the edge and figures out how to trade it first wins" Technical Analysis in its present form isn't going to cut it.

In any case, here's what I have for you, the main problem with any carry trade supporting the market has been the same since this morning, THE REVERSAL PROCESS, but that may be resolving.

 The earlier positive divegrence on the USD/JPY 1 min seems to have fired and failed already, but that may not be bad. Take a look at the 5 min chart below...

It seems there's the possibility of that failure now sending the pair lower to create a "W" or REVERSAL PROCESS...

The 5 min $USDX is finally supportive of such a move.

The intraday QQQ looks like it wants to pullback intraday to do the same thing while the longer charts...

like this 10 min would benefit from the pullback and "W" base in the Q's, especially if the Carry trades do it at the same time and fire together, if that happens, there's no denying the invisible hand in the market, at least we can see its shadow.

Some Leading Indicators are signaling the same idea... HYG would need to be activated for market support and take a look ion to the close.

 HYG vs SPY...

As far as Leading Indicators, our professional sentiment was right on about the downside leading negative and now, leading positive so that which we waited patiently for today is starting to look more and more plausible and all of this from the last 2 hours of trade on Friday.

Remember tomorrow is the release of the last F_E_D / F_O_)M_C meeting minutes, they'll be closely poured over, especially those infernal dots. The concept is ANYTHING F_E_D related almost always causes an initial knee jerk reaction that almost is always wrong and faded within a day or two.

Even though we had bullish closing reversal candles in the major averages today, we did not have the volume moving up which makes those reversal candles 100% more effective, perhaps tomorrow? 

There was a Dominant Price / Volume Relationship among the major averages today, Price Up and Volume Down, that's the most bearish of the 4 relations and often leads to a close lower the next day, it's like a 1-day overbought condition.

Watch for volatility, as long as we're on the right side of the trade and I think we will be, it should be a blessing, but the minutes should crank volatility amplitude, we need to enter trades that are screaming for entries, not take chances here, I am still leaning about 85% short.

From here, one step at a time and as always, patience.