Early Indications

So far this morning the pre-market opening indications were right and for the right reasons, the divergences kicked in and moved to the appropriate levels, a gap fill attempt. This doesn't change anything about the Futures analysis from yesterday as that  was more macro analysis and I think we are starting to see that play out in the intraday timeframes already.

Here are some early indications of the movement this morning and what looks probable so far...

 QQQ with the opening divergence seen in pre-market with a gap fill attempt and a negative divgerence intraday near the gao fill.

The IWM with the exact same.

And the SPY with the exact same, although not coming as far.

The NYSE TICK from yesterday's tight +/- 750 range opened very low, lower than anything seen yesterday at -1200

The SPY Arbitrage was working on the open and faded in to the gap fill attempt.

 One of the components of the SPY Arbitrage, HYG which held the market up all yesterday made a serious move down on the open and then lost further ground, likely sending the SPY Arbitrage in to the red.


HYG local 3C chart with distribution in to yesterday's closing spike so the Dow could close green by +0.007%!

Our guess at where yields were yesterday by inverting TLT were right on as they gapped down with the bond market re-opening today after being closed yesterday, the SPX is drawn to yields (and the rest of the market so this is not a bullish indication. As part of our Futures coverage, I did cover the 30 year treasury bond futures and TLT, both suggesting a move higher in 20+ year and 30 year bonds sending yields lower, thus the market.

 A closer look at yields gap down (red) vs the SPY (Green).

And TLT's larger 60 min positive divegrence suggesting a high probability move higher, yields lower.

As well as this morning's TLT action with a gap up off a positive divegrence and in line thus far so this is a pretty strong set up this morning pressuring stocks.

 /ZB the 30 year treasury bond futures are also in line intraday like TLT, meaning price / trend confirmation.

One of my early pre-,market expectations was a probable bounce in USD/JPY which we have expected to lose ground, even though the word is there  has been profit taking after algos discounted (rallied) on the same news 4 times as Reuters repeats stories and they are picked up by other media outlets for the headline scanning algos to chase. I don't know about that as we've shown at least a week back that there was weakness building in USD/JPY and it was coming down, as early as yesterday in the Futures update.

 The components of USD/JPY are a bit mixed so this may be tricky, the 1 min $USDX looks like it wants to come down which is not supportive of a USD/JPY bounce, but...

The 1 min Yen also looks like it wants to come down which is supportive of a USD/JPY bounce, I suppose it will be a matter of relative performance, but as far as the sturdiness of the move, go out to 5 or 7 min charts and....

 The Yen has the support to send the USD/JPY lower.

The $USDX's downtrend is confirmed suggesting lower prices in USDX and USD/JPY.

Taking a little longer view with a more conventional indicator, RSI 14 (Wilder's)...

 Here's a negative divegrence in the October cycle in SPX..

 In the NASDAQ 100

In the Russell 2000 and...

In the D0w 30.

All fitting well with leading indicators, 3C indications, breadth indicators and mass psychology.