FX Update

I'm getting ready to go through the 100+ Futures charts in getting ready for next week, but I have a pretty good idea where we are going. I often post the 4 stages of a cycle because you have to know where you are to know where you are going or at least the highest probability.

In downtrends like this we can get some monster looking bounces , even intraday which is what I have suspected we may be building up to today, but so far beyond that, I'm not seeing anything really convincing that would take us of course in what I believe the next significant downside target is, which is a break below the SPX's 200 day.

As for the Carry trade intraday as I don't have much reason to believe it can do much more than a very short term move based on what I've seen in the Futures charts this week, it may be able to offer some support through the close.

 This is USD/JPY in candlesticks and ES in purple since the bounce cycle. ES follows the USD/JPY almost perfectly. but remember the earlier in the week warning of being careful about what assets you choose to trade and making sure they are liquid as even a winning trade can be difficult and sometimes impossible to get out of in a market like this when liquidity is low in the asset, this happened to me with SKF years ago, but had more to do with the discretion NYSE specialists have over NASDAQ market makers.

There was another analogy of a crowded room and a shrinking door, that's the panic of a bear market and the reason they fall approx. 2.5 to 4x faster than a bull market rises. Note to the far right ES has dropped correlation with USD/JPY, that's fear.

 This is the USD/JPY intraday, it has a negative divergence ore-market and taken alone, I wouldn't think there would be much opportunity for it to turn to the upside intraday.

 However the EUR/USD which if it turns down would help the $USD and by extension. likely the USD/JPY does have a negative divergence in it, this is a 1 min chart though so it's not something I'm considering beyond this afternoon in to the close and "maybe" early next week if it were to show more weakness.

 This is the $USDX  min chart, slight positive as it loses some downside momentum.

 This is the Euro intraday (futures) also with a negative divergence like EUR/USD which could be helpful to $USD upside.

 And 1 min Yen futures negative, again, if it worsens and they come down, it would be helpful to moving the USD/JPY up and that would give the market some intraday support, possibly in to early next week if it were to strengthen or rather weaken in this case significantly more.

 USD 3 min positive

 Euro 3 min negative

 Yen 3 min negative.

Those are NOT screaming signals, they are not on 5 min timeframes.

Really the main concern I have near term for the market's downside is the TLT  divergences which could support a market bounce.

 The 1 min chart that I just started noticing yesterday is very clear today.

The divergence has migrated through several timeframes and is leading at the 5 min.

TLT 5 min.

Remember that Yields which have been leading the market, trade opposite bond prices so a drop in TLT/30 year Treasuries would send yields higher which is what equities have been following.