Still Indecisive

This market just has a dull indecisive look about it, even though it's down pretty hard on the day, the difference between the SPX and RUT is showing up on our custom SPX:RUT Ratio indicator as NOT confirming today's lower prices.

I'll try not to bore you with a bunch of charts essentially showing nothing of useful interest, but I'll say that Pro Sentiment Indicators are in line to slightly positive with the SPX, they are not leading the market higher and they aren't collapsing. VXX and spot VIX are in line with the normal correlation vs SPX, but TLT is showing better relative performance, in fact most of the curve is showing better relative performance meaning yields are generally lower, some worse than others, which tends to attract prices toward them. I'd say this is one of the few charts that looked interesting to me.

30 year yields leading the SPX lower (yellow). However the bond market closes at 3 p.m., looking at the 3C charts of Treasury futures across the curve, it looks like very near term the 2 and 5 year have the best 3C charts supporting their moves higher (lower yields). The 10 and 30 year have had good 3C support all day, but nearing the close it's falling off a bit, not a glaring divergence, but not perfectly in line.

High Yield Credit is surprisingly dull. HYG is outperforming intraday vs the SPX by a bit, all of the other HY assets I check are mostly in line with the SPX, not hinting at higher or lower prices.

I see some intraday weakness in the $USDX and some intraday strength in the Yen, but the real divergences that moved USD/JPY were formed between 5 a.m. and 8 a.m. which is EXACTLY what moved the market lower from the overnight ramp on ECB QE chatter to in line with the closing divergences of 3C on Friday which were suggesting weakness this morning on the cash open.

As such, the signals for the pair were earlier today, not really now...

 $USDX 1 min was very negative between 5 and 8 a.m. as the Yen was very positive at the same time.

For whatever reason this 3C concept of picking up where it left off works, you can see the actual mechanics that fulfilled the 3C signals from the close Friday as you look at USD/JPY vs ES below.

USD/JPY in candlesticks and ES (purple) are tied together from 5-8 a.m. and the pair pulls Index futures lower after being ramped at the European open, quite an interesting chart from a scholastic point of view, other than that, I'd say at some point the $USD finds some legs.

I've been through most of the major currencies that would effect USD/JPY and haven't come up with anything really standing out. I've looked closely at the Treasury futures for 2, 5, 10 and 30 year and again, there's not a lot standing out that has enough confirmation to really warrant even posting a chart.

Intraday Index futures are mixed with a slight positive bias, but again this is intraday 1 min. The 5 min charts have caught down to the negative divergences that were there before the open so most are in line, again a little mix with a slightly more negative bias. Seven minute Index futures are the demarcation line like the 5 min 3C charts of the averages and like the 3C charts of the averages, at the next longest timeframe of 10 min, they go very negative, in similar fashion at the next longest timeframe for Index futures (15 min) they go negative, which I explained earlier when talking about multiple timeframe analysis, this is the highest probability resolution to whatever is going on with these 5 min charts, whenever they are finished in this mini cycle from the lows of the 6th.

The averages themselves are almost infuriating . The main theme is in line on 1-3 min charts and in many cases that's somewhat negative.

If you recall the Dominant Price/Volume Relationship from Friday, it was Price Down/Volume Down, which is the least influential relationship, I describe it as "Carry on" as in "Do whatever you were doing", which is more or less what the market is doing today. The 3C charts are more or less taking that right to heart and acting in the same manner, again as I said, for the most part in line with today's overall negative price action. The 5 min charts that I hoped to see give us a strong clue, I have realized are nearly perfectly in line as well since they got sloppy on the 8th. 

TICK is DEFINITELY negative today, a lot of prints at -1250 and worse.

This doesn't change or resolve the fact that there's essentially still gas in the tank for the initial oversold bounce we expected and that set up in the charts, which means right now everything really looks like "LIMBO".

I'm going to take a stab at this from a different direction unless some of these charts start to really move, and go through the watchlists and see if there's a dominant theme anywhere among them.

Again, I'm staying absolutely patient here...Patient with the positions I have open (short) and patient with the market and not try to force a trade that isn't there or doesn't have the signal that gives us a strong edge.

Sometimes the best thing you can do is be patient. Some of you may remember the SPX trading range that lasted well over a month with nothing moving more than +/-3% through the range, it was a time you did not want to be in the market or trying to force something to happen and as infuriating as it was to me, because there were so few to no 3C signals, it was only after that we realized why, the market was in a tight range in which you'd just have been in a meat grinder. We aren't at that point, but I would be patient.