Market Update

I've noticed some strange things today in the market, but I haven't been able to exactly put my finger on what it is, what's causing it. I don't see today as an actionable day, meaning a time (broadly speaking) to be entering new positions, although we have deterioration, we aren't at the point in the cycle in which charts are jump[ing off the screen and that's when we have our sharpest edge, like USO, like MCP, etc.

I can only make a quick and obvious guess that perhaps some of these strange things are related to the ECB's, the Troika's and generally the EU's reaction to Greece and how Greece gave up a position of strength, which was seen in the way the German Finance Minister was pretty much dismissive of the Greek Finance Minister in today's meeting saying that "My advisor said I should say we agreed to disagree", with the obvious implication being there's not even that much agreement between them.

I think this puts Greece in the role of wounded animal backed in to a corner, rather than negotiate from strength which perhaps their inexperience , caused them to give away after a few friendly probes from the EU, they are now in a position of accept whatever the EU tells you or break all boundaries , exit the EU and let the chips fall where they may which almost inevitably ends up with Russian aid and a Russian naval port smack dab in the middle of the Mediterranean and in the heart of Europe. The stakes went from extreme to beyond comprehension in less than a week, that may be what the market is starting to reflect, it may be partly op-ex related, it may just be the tail end of a multi-year cycle without precedent, except the 1920's and the Great Depression/MArket Crash of 1929 as the closest thing to a historical precedent, in other words, we have no map in which to gauge the current situation because the last 6 years are without precedent.

Here are some of what I noticed today, although I'm far from finished, as I said above, I see the odd behavior, but haven't put my finger on where the smoke is coming from yet, in any case I don't consider this to be actionable at the moment, but there's a clear increase in the rate of activity moving toward actionable.

Whatever it is that I'm picking up on, it's very apparent in Capital Context's, ES model, risk assets are picking up on the same thing.

The Context model for ES/SPX Futures is showing a move today of risk off in risk assets that usually move with ES and put ES at a premium of nearly 30 ES points (too rich vs how other risk assets are behaving that normally would move with ES).

In other words, I'm not the only one seeing whatever it is, managers are moving out of risk assets that would normally track with SPX futures.

Here's what normal looks like in intraday steering divergences, QQQ 1 min.

 This is "normal" QQQ 1 min intraday, but beyond the intraday steering divergences...

 There's a sharp negatie change in character in QQQ 2 min, just as I showed earlier and in Tech as the NDX is tech heavy.

 QQQ 5 min and the divergence which is about right, but I wanted to point out the gap right in the area, a gap fill would be an obvious target.

 IWM 1 min in line and positive at yesterday's close with a sudden drop off of 3C today, like the 2 min charts, it seems something has changed quickly in the market's discounting mechanism.

 IWM 3 min is about in line with the other averages.

SPY 3 min has unusual movement today

The SPY 5 min divegrence is one of the best examples of a divergence, it has been seen in all of the other averages and it's only a short period of time before this divegrence takes over market action (negative).

Note Energy / XLE also saw an unusual move on their 3 min chart, pointing to whatever this is, being something that happened in the last 24 hours.

XLE 5 min along the lines of the major averages, so it hasn't had that much time to migrate, again seemingly along the lines of the last 24 hours or so.

It's possible Energy stocks don't follow Oil on the upside beyond what they already have.

Look at this VERY strange leading negative in the XLF / Financials 5 min chart, not usual.

 Tech as pointed out earlier also seeing a sharp, negative, unusual move today.

Otherwise the 5 min XLK chart is about in line with expectations.

And the very unusual TICK Index today, finally acting a bit more normal toward the afternoon/close.

This is to say NOTHING of the $USD which I thought would have to come down before a F_E_D rate hike, but I didn't see how, well it's down today and as you'll see, there's a large, longer term chart divegrence suggesting it's just the start, what the catalyst is, I don't know, but as I said in reference to the $USD, the F_E_D will need it lower before hiking, how they do that is an unknown,  but the 3C charts often show us the move before we can understand why, the problem was at the time, the 3C charts weren't showing us the negative divegrence, they are now, I'll get to that shortly.

I'd stay patient with an op-ex Friday and pin coming up tomorrow, but also the NFP, which will be the key data point this week at 8:30 a.m.

I don't think the charts are there yet to take strong action broadly, but today has certainly moved them closer quicker for whatever reason.

More to come...