As mentioned in the last post, it's pretty clear from relative performance and the normal correlations that the VIX is not going to be pushed around much more, I suspect from the 3C charts that it's actual demand (it's a bit rare to see actual supply/demand dynamics in the market, at least since 2009), but fear will do that and the level of complacency in the market, well I'd think it's generating some fear, especially these moves since the F_O_M_C minutes and their volume.
The VIX was down -8.10% yesterday and -0.92% today, not at all the same bullying of the VIX or "Monkey Hammering", but that was evident in the earlier
SPY Arb, USD/JPY, VIX Futures post today as the VXX correlation vs the SPX was clearly not giving up the ground.
Therefore TLT and HYG was used, but seeing some initial moves in TLT makes me think that this lever is shot , at least near term and the HYG 15 min charts from this week tell me that one doesn't have much left in it (then there's USD/JPY).
So I closed the TBT (UltraShort 20+ year bond / TLT).
This basically came in about break-even...
TBT has been working pretty well for us the last 6-days, but it is nearing resistance.
It's not that I don't like TBT, it's not that I don't think something is going on with TLT that should send it lower, whether to base or perhaps the normal "Flight to Safety" properties of TLT have changed as the F_E_D pulls out of its bond buying and China and Russia are obviously not going to pick up the slack, if anything they'll create more slack so we'll have to see what TLT looks like on the way down which I do believe is coming.
TLT 3 min showing positive divergences early and suggesting the TLT manipulation or use as a lever to ramp the market is no longer dependable.
Remember the typical F_E_D knee-jerk reaction usually lasts between 2 hours and 2-days (although this one seems clearly engineered, not true knee-jerk) as there really was nothing of consequence in the minutes.
TBT gave us good reason to go long as a trade which it was with a nice positive divegrence, but the 5 min chart there is going negative which means the TLT 5 min chart...
Should be positive to confirm which it is. That's enough for me to close out the TBT trading position for now.
However, as I said in the close out post, Closing TBT (long) For now,
I'll likely be back, this is but one reason.
TBT 60 min large positive and...
TLT 60 min large negative.
Again, what the dynamics are at this point are unknown, whether TLT will pullback to the base area around $102 and be a great long (which should show good positive divergences on the pullback) or whether there's real concern that there won't be demand for Treasuries (in which case a TLT pullback will not show positive divergences/accumulation), either way it allows us to enter the trade with the knowledge of which way it's going by the time it gets there.
Even intermediate charts make TBT look like a good long, 15 min positive with...
TLT 15 min negative confirmation, however, the near term charts suggest that this trade is probably a bit off if TLT is going to regain some "Flight to Safety" strength. VXX is showing signs of the same.
HYG's 15 min leading negative divegrence,
there's something going on here, I doubt HYG will be able to hold up as a ramping lever with trouble like this brewing and intraday...
HYG is showing near term trouble on its ramp today, along with TLT and VIX sitting it all out, this doesn't look particularly good for the market.
At least yesterday's TICK data was strong as there was a short squeeze and that boosted intraday breadth, today since the noon time we've been in a VERY shallow +750 to -500 range with a 3:05 shot down to -1100 which is out of character for the day, that -1100 stock decline on that bar was right here on the SPY...
SPY- 1100 TICK reading.
And as mentioned, VXX/UVXY are showing clear demand today...
VXX 1 min
UVXY 2 min
VXX 3 min
As I said, it looks like the VIX isn't giving up anymore ground and it looks like it's due to real demand or put another way, real fear.
No comments:
Post a Comment