The massive US data dump Thursday, which initially knee-jerked as good news is bad news as it probably should have considering the bigger picture and the F_E_D, was quickly reversed, but many things weren't making sense Thursday even as the markets (Dow/SPX) moved to new highs on the half day trading.
I mentioned several of these strange outlier events in Thursday's Daily Wrap, including professional risk sentiment selling off, High Yield credit selling off, VIX not weakening as it should have intraday, the retracement of treasuries with this chart from Thursday's Wrap,
The SKEW Index rose again and is over 142 and well within "Black Swan" territory. Gold has continued the pullback we expected and thus far in Europe, shares of miners are pulling back as we expect in the US. Nat. gas for those interested is also down among other commodity softness like the PMs.
Asian markets traded with a softer tone as it diminished from mid to late last week to overnight, the Nikkei -0.37%, Hang Seng -0.03%, Shanghai +0.03%, essentially flat.
Europe is trading with a softer tone, mostly down around 0.50%, the CAC 04 down closer to 0.75%, Financials are underperforming and as we have seen for the last month plus in the US, Utilities, a flight to safety trade are outperforming.
We'll see what early tone looks like, but I'm sure you know I think we are at the edge of something as we are sitting on top or just sliding off the edge of a lot of H&S top right shoulders.
Although Index futures haven't retraced like treasuries or USD/JPY yet, I think they will, that was the point of all the strange action pointed out Thursday.
Here's ES/SPX futures which have been softer since opening this week.
However we did end the day Thursday with 3C inrtraday negative divergences, Intraday distribution high in to the close, especially in the QQQ and even over a 3-day weekend, 3C tends to pick up right where it left off, I realize that's a partly cloudy forecast, however that's just the facts of the matter (why we thought they'd wait until Thursday for Dow 17k and how 3C tends to open the next trading day).
Other than that, we have AA kicking off earnings season tomorrow after the bell. My gut feeling is that analysts have a little "too lofty" expectations for EPS and overall earnings for the quarter.
In any case I do expect we'll see the NFP gap filled, the important thing is price movement, that's where we get the most information for forward looking forecasting.
I'll also be looking for positions that are in especially good looking areas, as you know.
Hope you have a great week, I'll be back shortly after the open.
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