Additional Futures Color

It's hard to say just exactly what underlying trade will do on quad-witching, at least until the late afternoon (after 2 p.m. when most contracts seem to be settled), however if we continue on the trajectory and at the rate that we have seen since just after the F_O_M_C on Wednesday, all of yesterday as well as last night's and this morning's futures, I'd say we could be looking at the Crazy Ivan shakeout being complete and ready for a downside reversal as soon as Monday.

Here are some additional charts after having looked around a bit more while I wait for the morning averages to go through their normal morning games and start posting some reliable information.

While I believe TLT looks like it needs the most work to reverse what I'd call a pullback (actually a lever for Wednesday's move), the 30 year Treasury futures seem to be moving at a faster pace of repair.

USD/JPY is probably just about the last ramping asset of use and the $USDX and Yen futures keep moving closer and closer to a downside reversal there.

I also looked at some longer Index future charts and realize just how much damage has been done to them (distribution in to price strength just as Monday/Tuesday's accumulation in to price weakness powered through the strongest short squeeze in 3 years on Wednesday, mostly small caps meaning mostly the Russell 2000 as expected.

This morning's price action is far removed from the last 2 days and looks exactly like the type oof percentage gains/losses expected for an options expiration maximum pain pin to ensure the greatest dollar amount of options expire worthless. The bottom line is that all indications continue to move along the expected path to completing a Crazy Ivan shakeout /  head fake move in the market which sets the bull trap and downside momentum to carry on last week's move down in the markets.

Charts...

30 year Treasury Futures

 These were showing improvement yesterday and last night, they are now moving higher off those initial divergences, although I'm having a little difficulty reconciling the faster pace of repair in 30 year Treasury futures vs the 20+ year Treasury bond fund, TLT.

 30 year T'-Futures 7 min chart with the negative divegrence pre-F_O_M_C / Market move with the negative divergence that would send treasuries lower, yields higher and the market following yields higher as one of 4 major levers we identified earlier in the week being prepped for use early Wednesday.

 TLT's 1 min chart looks good, it's the 2, 3 min chars that aren't on the same level as this one or as 30 year T-Futures.

 $USD 5 min chart going from in line to negative, with the main purpose of pointing this out being the near term future of USD/JPY as it has been a ramping lever, but one that is pretty badly dislocated from Index futures, thus there's a soft spot or bubble where there should be support for the market.

 The Yen futures (5 min) started their positive divergence just about the same time as the F_O_M_C came out which should tell you something about their use and now their repair as well as USD/JPY's near term directional change probabilities.

$USD 7 min negative  which is getting sharper.

I looked at the longer 15 min charts for Index futures as they have a cleaner underlying trend, less detail, but a clearer picture and found as expected, underlying weakness/distribution in to the price move, which is part of the confirmation of a head fake move or Crazy Ivan shakeout being the specific type of head fake move.

ES 15 min- these charts really didn't see accumulation like the 7 min charts, meaning accumulation wasn't strong enough to show up here, which is one of the ways we could see this would be a high probability head fake move, you can inly go so far with a half tank of gas. However the negative divergence between 3C and price is showing up quite clearly suggesting much heavier distribution activity.

The same is plainly clear for Tf / Russell 2000 futures.

As it is for NQ / NASDAQ 100 futures.

This is why I say, "If we keep on this trajectory at this pace, we could be looking at a very nasty move down by Monday", which would also tie perfectly in to my theory that this move would be used to draw traders in to what they think is the Santa Claus rally (the last week between Christmas and the New Year in anticipation of the January Effect.

If we were to see a sharp reversal early next week, the expected Santa Claus rally will have failed, leaving numerous longs at significant losses as they will buy the Santa rally just out of expectation that it will be there every year like clock work.

A very interesting potential set up / Bull Trap.