The Week Ahead

I had to get started on this a bit ago to get it all in there. I may have some near term revisions after seeing the market internals and after having a bit more time to look at the Treasury curve/treasuries.

The consensus for Yellen's comments today was off, they expected a much more dovish tone to be struck, it was not. The market also seemed unimpressed with Draghi's essential repetition of the same themes over and over without anything resembling action, just look at the market's lack of response.

As far as very near term action at the start of the week, we usually have something as 3C divergences pick up where they left off, but there's little to go on today. I'll have charts out just after the close.

Hopefully during the week you saw enough as it happened to get a feel for the market.

Short term intraday divergences likely aren't pointing to anything specific because the continuation and completion of the reversal process should be a lateral one, but choppy as most lateral trends are as there's little other trend that lateral making it a tough trading environment for short term traders.

However the longer term or trend charts of even intraday timeframes makes clear there's been distribution and we are in to the reversal process.

One of my back-=pocket measures of where / when this market would reach the end of the bounce trend was a break above XLF's range, that has happened and it's deteriorating fast. HYG is deteriorating fast, VIX futures are accumulating fast and treasuries are telling a bearish story and pretty fast.

The market got nothing this week, the minutes were hawkish, Yellen didn't peddle back and Draghi did what he always does and talked.

I think we continue the reversal process, on volatility spike we should have some nice short entries, FAZ is looking better every hour, AAPL is starting to fall apart and look like it's very close to an entry.

So basically the trend for most of the first half of next week should be more lateral/sideways price action with significant 3C deterioration.

Charts coming.