Then it got more interesting as the tin foil hat in my closet was dusted off as I had to question Bullard's comments as the market completes the move many credit him with starting , although we saw divergences up to 2 weeks ahead of the bottom as they grew, we knew this would be a serious rally, but the timing, well again take a look as I covered it here...A.M. Update: Bullard's Back At It, You Know We Are Heading Down
I also covered currencies and my thoughts that the charts are suggesting a lower USD/JPY and higher EUR/USD, again they were covered here...A.M. Update: Bullard's Back At It, You Know We Are Heading Down and look at the two this evening...
Of course the Nikkei was volatile overnight as I posted early in the a.m. hours and diverging from the USD/JPY...
As well as the US election results, which are largely anticipated to see Republicans gain control of the senate, which would put the F_E_D under a spotlight as Republicans are eager to cross examine the F_E_D's decisions re: QE, rates, etc., they may not be the only central bank under pressure.
While the ECB meeting Thursday is not expected to introduce any new QE, just a day and a half before the meeting we get the following mutiny against the ECB's Mario Draghi, perhaps making it difficult for Draghi to pass any controversial policy and more than likely having some roots that lead directly back to the F_E_D as they warned the ECB last Wednesday as the Euro dropped on the F_O_M_C, "Not to push too far" and that they "noticed" the drop in the Euro. Interestingly just after that and just before the meeting, Draghi's leadership is called in to question, via Reuters from this morning...
Reuters:
- NATIONAL BANKERS FAULT SECRETIVENESS AND COMMUNICATION STYLE
- SOME MEMBERS PLAN TO RAISE CONCERNS AT GOVERNORS DINNER
- DRAGHI KEPT AIDES IN DARK ON POLICY STEPS
- IRRITATION COULD MAKE IT HARD FOR ECB TO TAKE BOLDER STEPS
National central bankers in the euro area plan to challenge European Central Bank chief Mario Draghi on Wednesday over what they see as his secretive management style and erratic communication and will urge him to act more collegially, ECB sources said.
The bankers are particularly angered that Draghi effectively set a target for increasing the ECB's balance sheet immediately after the policy-making governing council explicitly agreed not to make any figure public, the sources said.
"We specifically agreed at the meeting... not to put any numbers on the table," one central banker. "Draghi's reference to the balance sheet of 2012 irritated a lot of colleagues. So he has had to backtrack a bit ... to compensate."
"This created exactly the expectations we wanted to avoid," an ECB insider said. "Now everything we do is measured against the aim of increasing the balance sheet by a trillion (euros)... He created a rod for our own backs."
Even members of the ECB's executive board - the six-member inner circle that runs the bank - were not informed in advance about two key recent policy announcements, two sources said.
"Mario is more secretive... and less collegial. The national governors sometimes feel kept in the dark, out of the loop," said one veteran ECB insider.
...
At times, Draghi has appeared to pay little attention to national governors' comments in the monthly rate-setting meeting after chief economist Peter Praet and board member Benoit Coeure report on the economic situation and financial markets.
"He sits there with these three mobile phones in front of him and sometimes he’s sending text messages or going out to make or take phone calls," one source usually in the room said. On at least one occasion, a national governor has skipped his turn to speak because Draghi was not present."
In addition, the market reacted to the Draghi mutiny with some risk off behaviour before popping back to VWAP, which may be what our intraday positive divegrence was all about and perhaps nothing more...
Dynamics of Intraday Trade
ES 1 min and today's events relative to VWAP.
I already showed you the bigger picture again in both Leading Indicators and 3C charts...
Broad Market Update and
Leading Indicators and the Reversal Process.
However, that's not where the divergences stop...
NQ 15 min leading negative at the tight range...
ES 30 min leading negative at the tight range..
TF 60 min leading negative at the tight range.
"Perhaps the kids in the room next door are a a little too quiet and up to something".In addition, the market reacted to the Draghi mutiny with some risk off behaviour before popping back to VWAP, which may be what our intraday positive divegrence was all about and perhaps nothing more...
Dynamics of Intraday Trade
I already showed you the bigger picture again in both Leading Indicators and 3C charts...
Broad Market Update and
Leading Indicators and the Reversal Process.
However, that's not where the divergences stop...
On the day just about everything was sold, stocks, bonds, the $USD as forecasted , oil, Treasuries and you've sen our leading indicators and HY Credit, especially HYG...
Stocks on the day after pulling out of the Draghi downturn and just before visiting VWAP, also seemingly are back to moving on the European close.
I featured some monthly Heiken Ashi Candlestick charts as I believe they're a bit more robust than normal candlestick charts, although they are read slightly differently. You saw the monthly bearish Doji star last week, here are some closer to home signals in the major averages... "To make money you have to see what the crowd missed"...
In addition as you have seen in recent posts in both relative performance and 3C charts, Transports are in the cross hairs, these are one of my favorite shorts in this area right now, I'll have an update out tomorrow.
While the averages themselves didn't move much today, we saw a lot of underlying movement over the past several days reaching extreme levels, commonly seen in a tight range which is what the market has been in the last several days leading to some monstrous negative 3C divergences.
As for internals today, there wasn't a Dominant Price/Volume Relationship among the major averages today, yesterday's was the most bearish and usually ends with a close lower the next day in which 3 of the 4 major averages did close lower.
The S&P sectors saw 3 of 9 close green with Consumer Staples leading at +.51% and Energy lagging at -2.15%.
As for the Morningstar groups I track, only 78 of 238 closed green.
While most internals or breadth indicators didn't move that much, the ones that did were the important SPX vs percent above moving averages (40/200), those saw more deterioration today than I'd expect given they barely moved yesterday. The New High/New Low Ratio, the 4, 13 and 26 week versions of the same all deteriorated materially and just because I have the 2007 breadth readings memorized, I thought this breadth indicator is starting to look a lot like 2007...
I'll be keeping an eye on futures tonight as I did last night leading to my 2 a.m. post on the Nikkei 225 futures and their huge intraday decline, you saw the Nikkei longer term 3C charts above and they didn't look good.
Although we're just getting started, it's not on the good foot as the NKD 225 futures have lost 17k again...
I have to say, I feel pretty comfortable we're at the top/pivot, that's why I was a bit more aggressive without caveats on using any strength today to short in to, hopefully you're already pretty well positioned.
I may be talking with you soon, otherwise have a great night.
No comments:
Post a Comment