Early Market Update

There has been some light intraday weakness in the averages this morning, the very strange 3C cart which in my view was abnormal accumulation or rather just straight money being pushed in to the market to try to effect the head fake breakout. Each average has its own very identifiable range, but I've been using the SPX as an example...

 This daily SPX chart shows what the goal is, a breakout above the March resistance area, but not just a breakout, one that will see heavy distribution and set a bull trap, a head fake move which is already a high probability by concept alone, in this situation its nearly inevitable.

 The USD/JPY as suspected in the A.M. Update has seen price weakness on the continuing 3C weakness. Remember the same forecast for the market on April 2nd also included a $USD forecast expecting a bounce which came and a reversal to a larger decline, likely one that effects the primary trend as the $USD failed to put in a higher high, it's likely it moves to a lower low. This has all kinds of consequences from the F_E_D feeling much better about earlier rate hikes to the $9 trillion $USD carry trade unwind.

 The USD/JPY in candlesticks vs the SPX futures/ES. Note the weakness in the correlation late yesterday as we saw market weakness in to the close, the two have for now started to dislocate. It really seems like they are throwing just about every ramping lever possible , even to the very strange 3C movements yesterday that I have rarely seen, still the market seems to want to sell any strength it gets as exemplified in last night's daily wrap showing the difference between the three she chart of averages that moved and those that didn't like the IWM/ Russell 2000. They need something to sell in to.

As for this morning's charts, in very early trade…

 SPY 1 min showing yesterday's late day weakness

 The overall reversal process on a two minute chart with seriously deteriorating 3C Signal.

 Andy very strange, almost "forced in cash" look of 3C yesterday at the yellow arrow. At the two white arrows or accumulation areas, although small, the following moves made sense with the "gas in the tank" of those particular divergences. Yesterday's strange behavior posted here, Unusual Market Activity-I Wonder Why... was in all of the averages and looks like flat out manipulation just as NANEX confirmed yesterday in S&P futures around noon.

Go to the longest timeframe which is showing us yesterday is manipulation didn't make it this far meaning it wasn't that strong, and we see the reversal process which I crudely drew in. Note the rishi trend through the rehearsal process. I believe we will still get a head fake move which will create the very typical igloo with a chimney price pattern, The igloo being the rounding top, The chimney being the head fake move.

I cannot stress enough how weak the market looks here. Although we did see that same strange behavior in every average yesterday around 3 to 5 minute charts, the strong charts with the highest probability resolution are looking her renders. For example…

The 15 minute IWM trend seeing distribution, but as you can see to the far right distribution has taken on a whole new tone. This is why I believe a head fake move or rather a breakout above resistance areas in the averages will result in a failed Head fake move.

So far the in today TICK has been very mellow.

I'm going to try to get some other chart examples up, you know things can move very quickly in these time frames. My general forecast for head fake has not changed and that is where I think we have the greatest opportunity with the least risk.

However make no mistake the market looks very weak here and if it is impacted with an unforeseen fundamental event such as a Greek default or something more unexpected and less discounted, all bets are off.