Morning Update

You probably noticed today's market tone is quite different than the last week, it should be. All of the ramping levers are deployed...

 HYG has now moved up off its pos. div. which is all that counts for price action, the divergence itself does nothing for price, it's the move higher in HYG that ramps the market.

VXX/VIX as we've seen the last two days especially has come down as it moves opposite the market.

 And TLT's divergence yesterday has sent it lower, yields higher, thus giving support to the market near term for higher prices.

Finally the USD/JPY (candlesticks) linked up with ES/SPX futures just after the European open this morning around 4 a.m., and have been moving together in lock step.

 There are several divergences in the SPY, I chose this shorter 2 min chart so you can more clearly see the a.m. price action higher, although it would not surprise me to see a pullback to the red area before continuing higher, it's really not a matter of concern.

 The QQQ 2 min also higher this morning, remember to keep an eye on NASDAQ Biotechs, IBB as a possible trade set up. So far they are about doubling the NDX's performance today.

 And a near term chart of IWM which also looks like it could pullback a bit, but that's not of much concern.

With all the levers deployed, you either chose to trade this on the long side in which case it's about management for now or chose to wait for a bounce to short in to price strength and underlying weakness in which case, it's about patience as well at this stage.

Looking at the component currencies that make up USD/JPY, I found this today...

5 min $USD negative

5 min Yen positive. This would suggest USD/JPY weakness and thus market weakness unless another JPY pair rotates in. Right now it's very hard to tell whether this is very near term for a quick pullback or this is the first sign of a dent in this bounce already which would be a bit surprising.

I'll be looking for possible leaks of the minutes, watching the market for any weakness brewing which should hit the levers first (USD/JPY, HYG, TLT, VXX) as well as any price action in to the minutes release at 2 p.m. today.

Other than that, the majority of my time will be spent looking at assets such as the NASDAQ Biotechs to see when they are giving signals that their move is weakening and thus ripe for a short sale entry or early warning for some  of our more aggressive traders who chose to play this long.

I may be a bit more quiet than usual today, that's just because now that we have the bounce the evidence was pointing to, there's not too much to report on until something changes, otherwise I have a lot of work to do in looking at several hundred assets on my watchlists for potential trade candidates.