Market Update

Earlier today we had an interesting situation, the 5 min Yen negative was just about matched in weakness by the $USD, which creates sort of a stalemate being FX pairs are the first symbol ($USD) is the long of the pair and the second (JPY) is the short of the pair (USD/JPY), if both are weak, that creates an odd situation, but that seems to be resolving if only temporarily as the longer Futures charts in the 15 min range, are negative for price action in USD/JPY and by extension, the market. However, for the immediate future, we are more interested in bounces to short in to.


This morning's move lower brought  ES, NQ and TF in line with the leading negative divergences on the 5 min charts that were forecasting a decline in the Index futures, that leaves some room for a bounce and thus far, we have intraday positives on both NQ and TF (NASDAQ 100 and Russell 2000 Futures).

The FX single currency futures are also becoming supportive of a bounce as well as the USD/JPY to a lesser extent.

 USD/JPY 1 min.

As we were looking for yesterday morning, A.m. Market Update

"As far as the $102 level, I'd expect price to either drop like a rock or linger and then drop like a rock, taking a couple of stabs at $102 again, I don't think much will hold, but I do think they'll try."

"We'll see what early currency futures look like on the first attempt, I really don't expect anything to hold and then I suspect they'll give up pretty quickly." 9:21 a.m. May 14th

And...

 Time to Start Looking at Trades... USD/JPY Update 

"As I said this morning (and this applies to just about every asset), the broken support of $102 from this week will likely be tested at least once, there may be some moves above and back below, it's what I call "lingering or loitering" and it often happens when important support (Especially) or resistance is broken, it's what TA would call a , "Test of resistance"....we saw some early signals this morning that this is a probability on the USD/JPY 1 min chart, the Yen 5 min chart and with the $USDX 5 min to a lesser extent.These charts could still dissipate, but I doubt they'll do so without a test at least. "

"The current dislocation of ES, above the correlation gives us some decent short opportunities before it catches down to USD/JPY which I suspect will occur after resistance is tested and fails at least once."  10:30 a.m. May 14th

So far, all of this has occurred, the failed tests of $102 as seen above, the catching down of ES to the $USD/JPT correlation as shown earlier this morning, Futures Update 10:28 today.

 This is the Russell 2000 Futures (1 min) quickly giving up after the failed tests of $102 and the current minor positive intraday divergence.

This is the same in NQ or NASDAQ 100 Futures as well as the current intraday positive divegrence forming.

As for currencies which are very important still, although that will begin to fall -off after a bounce...

 The intraday Yen is starting to go negative, so any downward pressure higher Yen prices are putting on USD/JPY and the Index Futures, it should subside soon.

As for the weakness mentioned in the $USDX earlier, you can see it here at the highs which saw distribution just as the USD/JPY did at the same time as it broke above $102 momentarily, however that conundrum is resolving as the intraday $USDX has moved from negative and sending everything lower to in line with intraday 3C.

The 5 min Yen is at its highs, but the negative divegrence persists, any downside movement in the Yen as 3C is forecasting will be beneficial to USD/JPY moving up and Index futures as they are linked to the carry pair.

 The earlier $USDX 5 min negative has been resolved to the downside and is also close to "in line" with 3C which will allow the USD/JPY as well as the market to get some breathing room for a bounce.

The 15 min Yen is one of the high probability signals that the probabilities for longer term USD/JPY resolution are to the downside as Yen strength would help push the pair to the downside, however there is a minor negative divegrence that stems from today's signals.

This is a transient divegrence compared to the larger positive base as well as the longer term positive charts for the Yen and negative for the $USDX.

The 15 min $USDX still remains in leading negative position as mentioned above, so the probabilities remain for the market to resolve to the downside and  as you know, from indications ad 3C divergences posted earlier today, this looks to be a set up for a much stronger downside move than the small drips to the downside over the past  2 months.