Opening Indications

Shortly after the Employment Cost Index hit the worst print in 42 years, sending the $USD plummeting as well as USD/JPY and sending Index futures higher on perceptions that the "slack" in the labor market would forestall a F_E_D rate hike; we got the Chicago PMI at 9:45 to take some of the sting out of the 8:30 Employment Cost Index.

Chicago PMI (9:45 a.m.) has been in contraction under 50 for 4 of the last 5 months, but printed much stronger than consensus today giving the market a split view of the economy and in part, took some of the shine off the delayed rate hike expectations from the 8:30 a.m. data. Specifically Chicago PMI came in at a very strong 54.7 blowing away consensus of 50, even higher than the highest estimate in the consensus range of 53.8. Details show a 6-month high for growth in new orders and production and easing contraction in backlog orders and employment. Cost pressures are the strongest this year, up now for three straight months. 

I can't be sure if it was this print , an Op-ex pin or this...

 The 5 min chart of USD/JPY which we started getting negative signals for late in the week and the pair has made good on them.

Just so you don't think this correlation between ES (candlesticks) and USD/JPY (purple) is some flash in the pan specific to this bounce, below is a longer 60 min chart.

As you can see the correlation is nothing new, although it does come in and fade out of correlation every now and then.

As for opening indications, Index futures are all in line, but the averages all set up on the concept of 3C divergences picking up where they left off on the next cash open.

 SPY 1 min intraday was negative in to this morning and the gap up was quickly faded down with the highest 1 min volume bar since 7/27 (the start of the bounce base). This isn't exactly what I had in mind when mentioning the Igloo price pattern and a head fake "Chimney" being a probable outcome based on concept alone. The SPY looks a lot more like the traditional op-ex max-pain pin early on anyway.

The 10 min SPY is one of the charts I'm watching closely today. There's a pretty decent amount of deterioration and it's still pointing lower.

 The Q's were also intraday negative as of the close in to this morning's gap which was also faded, but then a quick , small positive divergence also putting the Q's within the range of an op-ex max-pain pin.

The 5 min chart of QQQ I showed last night is obviously one of the more interesting, what it does from here and whether that migrates will be a key observation today.

 The IWM was perfectly in line with yesterday's closing divergence and has for the most part remained so except for a small negative divergence that started to develop and continues. If it gets much worse, I "may" look at an IWM position, perhaps puts as  this is much more in line with a head fake/chimney .

The 10 min chart is of interest, it's at a very transitional place in which it should remain at status quo here or really start to fall apart.

VXX/UVXY did put in one of the higher 1 min volume bars of the week's bounce, but this isn't exactly what I had in mind when mentioned a head fake move in the VXX before I talked about it in the market averages. Intraday it's in line and that would be something I'd want to see change for a pivot call.

As for its longer term charts, this is a 5 min chart that is what I'd call screaming, but until the 1-3 min timing charts are doing the same, I think we are still in patience/observation mode.