The Week Ahead

After taking a quick look at Leading Indicators, not much has changed since they were all virtually negatively divergence yesterday and on the whole. One of the only supportive Leading Indicators yesterday was yields , but only on an intraday basis, I had mentioned it yesterday a couple of times and it makes sense with the action for Quad Witching.

However now that they did their job for a max=-pain pin for quad witching, they are back down again and now at new lows that are around the area of early February when this bounce was just getting started, in other words, they have diverged significantly since the Non-Farms payrolls on the 6th that sent them popping higher briefly.

I already posted the EUR/USd vs ES correlation which is significantly out of place and what I suspect is very clearly the carry trade unwind, I doubt very many people realize how important this is and what it means to prices of equities as funds leverage up their A.U.M. with things like the carry trade so to exit it, you have to close the assets you bought with it, which means stocks before you can unwind the rest of the trade which is getting downright dangerous as the Carry trade is often at insane levels of , well leverage (sometimes 100:1).

The SPY has already ran through its tank of gas on a bounce basis since we first saw signs on March 10th...

 The gas in the tank is already gone now as you can see above and the bounce should start moving back to stage 3 decline this coming week.

On an intraday basis, the knee jerk reaction looks to be exactly that as there was clear distribution in to it and today. I suspect with the way we'll probably close, we should see weakness early in the week, possibly Monday morning, but I wouldn't be surprised if we had a little more of this process leading negative before an actual downside reversal so unless I see something in to the close, I'll wait until Monday to add any additional positions like UVXY long.

The same is the case for the QQQ & IWM, and I might regret not opening the QQQ put position today, but I think I'll be close enough early next week plus the IWM and SPY puts are in place.

 Bounce chart gas in the tank is on empty.

 Intraday charts are worse and worse, this is what I may regret, I wouldn't mind as far as shorts go or leveraged inverse ETFs, but with options I want to be as close as possible.

 IWM 10 min where the positive was, leading negative now.

And intraday falling apart pretty fast.

There's so much cross asset correlation, I can pretty much look at VXX and see that it looks like another day would be a good idea (Monday) before entering.

 The important 10-15 min positives and the head fake move I wondered it we'd get, we did.

The intraday charts are building stronger divergences and migrating to say the 5 min below.

The 5 min chart is positive, but it's still building. I think 1 day or half a day is worth the wait.

Let me get this out to you.

I have every reason to believe we are finished for all intents and purposes with this counter trend bounce in most of the averages, can't call it that in the IWM.

In any case, I believe we should be moving back to stage 4 decline and soon be breaking below the early 2015 SPX range.