Market Update

The overnight session was a bit rough, not nearly as volatile as the previous overnight session, but pretty much a smooth glide lower, which I suppose could have been expected as we did have some ugly Index futures charts posted in the Daily Wrap last night.

 ES/SPX Futures having a bad week as forecasted last Friday, but the idea from last night's post and the information gather is that we have a weak bounce which as you can see after the overnight slide, we saw the bounce in to the cash open this morning.

Bouncing right off the Hammer-like daily candle from yesterday which was sitting at the 100-day moving average (See last night's Daily Wrap),

The $USD is seeing some weakness which is something I expected near term before a larger bounce and then an even larger decline, but for now, I suspect part of the $USD weakness has to do with tomorrow's all important Non-Farm Payrolls which will come out at 8:30, but there won't be much the market can do about it as it will be closed except for about 45 minutes of futures trade.

I suspect the reason for the weakness in the $USD may be a "Whisper Number " going around Wall Street that the Non-Farm Payrolls are going to miss badly.

Here's consensus from Bloomberg...

 The range is 200,000 to 271,000 with consensus at 247,000. The Whisper number is that gains come in around the mid 100,000 area (150k- or thereabouts), which they seem to believe will give the F_E_D a chance to float a trial balloon with something very dovish. Some examples have been to have a F_E_D speaker come out and mention QE4.

The F_E_D has no intent on QE 4 or any other easing as far as I can tell, the intent is to kill the $USD strength and I suspect the market is discounting this very elaborate fantasy that has been constructed around the whisper number unless there's a leak and someone actually knows not only what the NFP print will be, but what the F_E_D will do which would be totally at odds with everything they've done and said so far, but their problem with $USD strength is very real, thus it seems as usual, the market is ruled by perception and as such the $USD has been weak very recently.

I'd think the market would be more afraid to be in positions before the NFP considering the market is closed (cash) when it comes out and all of tomorrow for a long weekend.

 The run up in SPY this morning followed the divergences that were posted yesterday suggesting we would see some minor strength or a minor bounce like the positive divegrence that was posted from this 3 min chart and now SPY has run up toward the leading 3C level.

Intraday, this is the 1 min chart and the reaction after the early morning shenanigans.

 The Q's and IWM both ran up as well and both had similar 1 min charts with swift distribution although on a smaller scale pulling the averages back down a bit.

 This morning's NYSE TICK has been right in line  with last night's Dominant Price/Volume Relationship which was close down/Volume up suggesting a 1-day oversold condition and a bounce the next day (today).

Note we see a range that's above +1250 and very little on the downside, maybe -750, many more stocks are up this morning than down.

As for Gold, yesterday I posted my expectation that it pullback on a swing basis like the trade idea put out, thus far this 1 min leading negative divegrence from yesterday has been correct this morning as has been the 5 min chart below...

5 min GLD leading negative divegrence.

Things feel a bit eerily quiet this morning and that may very well be because most of Wall Street has already left town with only the machines running as they take an extended holiday break, I'm not sure we are going to see much action in to the closing of the week, it would fit with out earlier prediction in the week that the market tries to bounce weakly in to the close of the week.

In any case, I'm not going to waste much time on market analysis as we already know the big picture and intermediate picture are very negative and the short term picture as positive as it can be is weak at best right now so I'll see if there are any opportunities which should form a trend and reflect the broader market's expectations.

For now, I still think Gold has a swing move lower, I hope you were able to get involved this morning if you were interested.