Daily Wrap

Overnight Chinese data was indicative of a hard landing with the worst Q1 GDP print since 2009 with numerous other economic data prints missing across the board, however that's just one of the two sides of the coin while their stock market has doubled over the last year.

As we have recently seen, the Shanghai Comp and Hang Seng have been losing momentum as posted in the A.M. Update/ FXI Update last Friday, 

Excerpts below from Friday's FXI Update:
"Looking at FXI- FTSE/Xinhua China 25, there are some charts that a re more than a bit concerning...

 FXI daily chart which is very parabolic  and has the look of a potential blow-off top...

And the 15 min 3C chart in which apparently smart money was ready for a parabolic climb, one it looks like they are selling in to fairly hard ion this 15 min FXI chart."

Overnight the Shanghai Comp closed down -1.24% and the Hang Seng barely closed green at +0.21%.

It looks like the Hang Seng's recent momentum burst may be about to burst.

And 3C may have very well been picking up something interesting in China recently. distribution...

FXI 15 min 3C chart.

It seems what the Chinese markets do (price only) have less in common than what the actual economy and smart money seem to be doing, although a rather EXTREME example.

The Nikkei also finished lower overnight on Yen strength.

Our recent forecast has been for $USD longer term weakness (more on that), EUR near term strength and Yen near term and long term strength.

Here are the Yen charts based on our forecasts for 1) near term Yen strength...

 There have been numerous near term , building signals for a move higher in the Yen such as you see here on a 30 min Yen futures positive divergence.

However the bigger picture which reaches out to US equity markets via the USD/JPY carry trade is the Yen Daily chart...

 Not only has the Yen's price trend gone from down to flat (base-like), but 3C has been leading positive on a strong signal daily chart, indicating the USD/JPY carry trade is likely being closed which has dramatic effects on US equities with $9 trillion in $USD carry out there and open.

Just for a little taste, this is the Nikkei 225 in candlesticks vs the Yen ETF FXY on a daily chart...

The relationship or inverse correlation should be plain to see and its effects on the Nikkei, but the same holds true via the carry trade for the US equity markets.

Here's the SPX vs the $USDX in red via the carry trade, this is opposite of the normal $USD legacy arbitrage in which equities, commodities and precious metals usually trade inverse/opposite the $USD...

 SPX (candlesticks) vs $USDX (red), both moving higher.

In fact, on a 60 min chart of SPY vs $USDX in red, you can see how the $USD tends to lead the SPX recently as it moves up ahead of the SPX and moves down ahead of the SPX, recently it has started what I believe is our larger $USD forecast for a bigger move down...more charts below.

On April 2nd, the same day I posted the market forecast for a break to the upside in IMPORTANT: AAPL Set-up & Market Movement, I also put out a $USD forecast.

Remember the $USD would fall in the closing of the USD/JPY carry trade and the Yen would rise, US equities would fall.

Here's an excerpt from the $USD analysis and forecast from Thursday April 2nd....

“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.”

And here are the charts that are connected to the forecast...

 This is the 30 min $USDX Futures chart showing $USD weakness on 4/2 when the forecast was made which was seen as the following from the 4/2 except , "The $USD is seeing some weakness which is something I expected near term before a larger bounce "

Just after you can see a positive $USD divergence and bounce higher which I believe is closely correlated with the broad market, which is why it's important to the 4/2 market forecast.

 As for the rest of the forecast for the $USD from 4/2, "The $USD is seeing some weakness which is something I expected near term before a larger bounce and then an even larger decline,"

Note the 60 min $USDX futures leading negative divegrence currently, suggesting a larger decline than the bounce just after 4/2 that was forecast. the question is, how much larger as it is obviously VERY material to the carry trade and as such, $9 trillion is $USD liquidity/carry which effects the market as seen above...

This is the Daily $USDX futures 3C chart which shows confirmation on the $USD's strong move up, followed by a large negative divegrence just as the $USD makes its first significant pullback in this primary trend. The $USDX is now forming a small triangle and failed to make a new high on a stronger 3C negative divegrence.

Remember the Yen daily chart and that the USD would move down and Yen up on the closing of the carry trade.

$USD makes its first pullback and fails to make a higher high in to a significant daily 3C negative divegrence as a triangle-like price pattern forms, remind you of anything? Like the broad market?

It should be obvious by now that my interest in the Yen and $USD forecast is far beyond what the USD/JPY pair is likely to do, which looks like this...

Daily chart of USD/JPY and large 3C negative divegrence in to a lateral top-like area in the pair.

Obviously the broad equity market analysis has a lot more to do with just 3C divergences.

Carrying on with the day...

The Chinese Q1 GDP wasn't just bad, it was at 6 year lows, MArch Industrial Production (China) also missed, also at 6 year lows and Retail Sales missed at multi-year lows.

The ECB also met today, they left rates unchanged, however only a few weeks in to their QE, their are clear questions if there are even enough assets to monetize and the ECB's problem of not buying wasting assets or losing assets as German bunds are only 14 basis points away from trading at a negative yield! Meanwhile the Periphery is seeing sovereign default risk soar as their yields soar. Greek Yields hit 2 year highs overnight on an impending sense that Greece will default on its debt and unlike what the EU has been saying about a manageable Greek exit if it comes to that, they certainly seem to be concerned.

If Greece defaults and negotiations are going no where so it looks increasingly likely, the ECB will cut off ELA funding to Greek banks which will cause capital flights, capital controls, likely closed banks , Pensions unfunded as well as government workers salaries. I don't know about you, but that sounds like a recipe for revolt and it seems the Germans think so too as a recent article from Die Zeit says that Germany is preparing plans to STABILIZE GREEK BANKS in case of default (as several large IMF payments are coming due with no agreement with the Trokia or whatever the Greeks insist they are called and no more money in between the couch cushions in Greece.

The German plan, which sounds very different than the "could care less" attitude Germany has been projecting, would call for Germany to finance Greek banks and keep Greece in the Euro despite a default! As well as plans to ALLOW the ECB to finance Greece with Euros, but this would be contingent on the Greeks agreeing to something that they have not agreed to this entire time which has raised the very specter of default to high probability as the S&P ratings agency that just last September Upgraded Greece to "B" saying, "The upgrade reflects our view that risks to fiscal consolidation in Greece have abated." 

Today the S&P downgraded Greece to the much dreaded CCC+ rating as a default looms. If the Greeks don't become more agreeable after default under the new German plan, than Plan B is to facilitate the Greek transition back to the Drachma. At this point the entire EU Financial system would be in disarray and Greece may be the least of Germany's concerns.

The IMF said overnight they are increasingly concerned that the Greek crisis will "Unsettle Financial Markets", while the ECB has increased Greece's access to the ELA Emergency lending facility by another $800 mn to $74 billion to capitalize Greek banks despite NO PROGRESS being made with talks and the Greek Finance Minister having set a meeting with Lee Buchheit on Friday of top US law firm, Cleary Gottlieb. This is the same man who is a debt restructuring attorney who handled the 2012 Greek debt restructuring, so it looks like the end game in near.

Meanwhile, German Finance Minister and Gollum stand-in, Shaeuble says today that he sees no contagion from a Greek exit. Again, two sides of a very different coin, while minimizing and downplaying and Greek exit by Germany, they are scrambling behind the scene with emergency Plan "A" and plan "B".

Of course this is to say little to nothing of the ECB's QE program that has only been active a few weeks and scheduled for 18 months, yet German Bunds are something like a mere 14 basis points away from trading at a negative yield while the periphery of Europe sees yields rise as sovereign default concerns extend beyond Greece. Just how much will the ECB be able to monetize without buying trash or negative yields? Just another issue on the side-burner as Mario Draghi was attacked by a young, attractive , non-Greek European woman today during his prepared remarks as she shouted "End ECB Dictatorship!".

In the US, the April Empire F_E_D missed with higher prices paid, a collapse in New Orders to Jan. 2013 levels, Employment down, number of hours worked down and a final print of -1.2 vs consensus of a +7.17 print with the previous coming in at 6.9, this was obviously a HORRIBLE read.

Mortgage Apps were also down this morning in US eco-data and Industrial Production dropped to the lowest since Aug. 2012. Utility output was the WORST in 9 years  (2004) despite the radically cold winter. The print came in at -.6 m.o.m. vs consensus of -.3. This was almost the worst print since June of 2009 and the 4th consecutive miss. 

As you know already the EIA oil inventories beat consensus at a build of 1.3 mn barrels vs expected 3.5 mn, this is the best print over the last 14 consecutive builds, but still a record at 14 consecutive builds with last week seeing the BIGGEST BUILD IN 30 YEARS! Perhaps today's better than expected print should be considered in that light as the EIA's monthly report said they expect Saudi Arabia to INCREASE output next month!

This morning VIX underperformance was clear as I had said earlier in the day that I was sure SPY Arbitrage ( a short term way of pushing VIX lower, HYG higher and typically TLT lower in order to push the market higher, like a VIX Slam), as it turned out as I checked later, Market Update, the SPY Arb was indeed active and worse yet, the ES CONTEXT Model was negative close to 50 SPX (futures) points.

 SPY Arbitrage alone added about half of the SPX's +.51% gain.

While Contest shows S&P futures overvalued today by about 50 points.

The day got started on a VIX slam, part of the SPY Arbitrage sending stocks higher...

The VIX was SLAMMED right on the open after yesterday's tight range, however this shouldn't have been a surprise as everything we saw yesterday pointed t a higher close today.

VIX volatility has been picking up since the triangle and likely Crazy Ivan shakeout...

Also note the 3C negative divegrence at the VIX slam this morning and the positive divergence the rest of the day. Remember VIX trades opposite the market.

The averages looked like this intraday which was interesting as Transports barely closed green at +0.08% and they haven't been tracking oil as you might expect.

After the initial short squeeze open in transports as they looked the best on the day, they weakened and barely made it green by the close in salmon (Major averages today).

Checkout the volume in transports too today on the move lower in to the afternoon/close.

Transports (IYT) 1 min chart intraday with heavy volume in to the afternoon decline and ugly close.

I know you might expect oil's strength today to be the cause of Transports relative weakness, but there hasn't been much of a correlation between the two recently.

Transports (green) vs. USO (red), not the inverse correlation you might expect.

I mentioned earlier as well that there was a near flash crash in the German Dax, interestingly after that, the DAX futures and US market traded nearly opposite of each other.

DAX sees a near flash crash at the European close, then DAX futures and the SPX trade nearly opposite each other the rest of the day.

The averages themselves today held mostly the same 3C signals as yesterday at the close, positive or in line 1 min, everything after that horribly negative, here are some examples...

 DIA 1 min in line today

SPY 1 min slight positive then in line today

QQQ 1 min in line then a slight negative at the close.

IWM 1 min in line.

These are the near exact same 1 min signals from yesterday, along with short term Leading Indicators, projecting a bounce off the Hammer candlestick (bullish reversal) closing candles from yesterday.

However after 1 min, like yesterday, it gets ugly, implying the short term bounce in a reversal process and much needed as most triangles have barely seen a breakout and larger picture pointing to significant weakness. The SPY Arbitrage wouldn't need to be activated if there were market strength on a hammer close the previous day in ALL of the averages. CONTEXT argues for the same interpretation which has also been our near exact forecast.

 DIA 2 min leading negative in to the close, much more in line than the 1 min.

 SPY 2 min also leading negative and leading intraday in to the close.

IWM 2 min leading negative, like yesterday.

DIA 15 min leading negative and at the line in the sand or gas in the tank from the 4/2 15 min positive divegrences.

 SPY 5 min leading negative through the entire projected move.

IWM 15 min leading negative

And finally the 15 min SPY closes with a negative divergence.

As for Index futures, they still have scattered charts in the 7-15 min range, but once again, this is why they are one of the 3 main indications being watched to pin-point a pivot.

As I said earlier in the week and today, I suspect we may not get that pivot until the monthly options expiration this Friday.

Although commodities overall were supportive of the market today and up on a weaker dollar (see $USDX analysis above), Crude looks to be at the base's resistance area. I do expect Crude to make a strong trend reversal, but as I have suspected recently, I think it pulls back first and being we just hit the resistance area from late December, I suspect this is it.

Brent Crude 10 min futures, see the oil /gold update from earlier today, GLD's signals yesterday were flawless as it closed up +.87%, likely would have taken all gains from the +30% GLD puts closed yesterday in anticipation of today's move higher in gold.

As for Leading Indicators today, VXX showed the early weakness relative to the SPX (inverted to show the correlation)...

 VIX short term futures see underperformance as the VIX (spot) and SPY Arbitrage suggest, but see a little better relative performance toward the close.

Last night I started showing some of the larger signals in Leading Indicators, the ones that matter beyond a next day or intraday signal. For example, our custom SPX:RUT Ratio which led positive in to the lows that we pushed off from in the April 2nd forecast...

Positive going in to the April 2nd forecast and at a "W" base area in SPX, however in a near opposite position since, a larger leading negative signal . I'm starting to show these more as they are developing or in this case developed as I have set over a week ago as 1 of 3 indications I'm monitoring for the reversal/pivot point.

Our Professional Sentiment Leading Indicators...

 As pointed out last night, our indicator was supportive of upside today, however intraday today it went negative suggesting near term downside likely tomorrow which would fit well with the "Reversal process" which is often a range-bound (although small) area.

 The larger signal has been volatile, not supportive of additional upside trend and making a couple of leading negative signals including today in to the afternoon, just about since the open in fact. although there was that opening support that was forecasted from yesterday's intraday signal as posted in last night's DAILY WRAP.

Our second (confirming) Pro sentiment indicator...

 Also started showing the bigger, longer term signals which it added to today as has the one above.

Yields as mentioned yesterday that were trying to support the market as they lifted in the afternoon on low volume saw the long end slightly outperform on the day and the short end slightly underperform on the day. This is 10 year with yesterday's intraday support as well as today's, but the larger picture is in a leading negative divergence seen between points "A" and "B".

 On a longer term chart the divergence and dislocation (negative) is much clearer, this is what I'm looking for generally in all leading indicators.

You can see the same dislocation (negative) on a 15 min chart of the 5 year yield, which acts like a magnet for equity prices and pulls the Indices lower to revert down to Yields.

 Commodities as mentioned yesterday were supportive near term which was additional evidence of today's likely upside move (3C charts as well in the 1 min range, the closing Daily Hammers-upside reversal, numerous leading indicators intraday, etc.).

However the larger signal is negative in commodities which have started working again as a leading indicator/risk asset since the end of QE3.

Credit also wasn't buying what stocks were drinking today.

HY Credit dislocated with the SPX today as you can see again in HYCDX.

As for internals, yesterday we had no Dominant Price/Volume Relationship at all, today we have a dominant relationship, 13 Dow stocks, 53 NASDAQ 100, 853 Russell 2000 and 207 SPX 500 of the 4 possibilities. The relationship was Close Up/Volume Up which is the most bullish relationship of the 4, however, ironically this relationship also tends to represent a 1-day overbought condition and we most often have a next day close in the red for the averages.

As to the S&P sectors, again a slight overbought condition exists with 8 of 9 closing green. Energy led at +2.39% and Consumer Staples were the laggard at -.28%.

Of the 238 Morningstar groups, a strong 169 closed green.

Again, all of these conditions in internals point to a 1-day overbought condition, not in RSI or other typical indicators used for overbought/oversold, but in internals themselves which tend to be much more accuruate as the indicators can stay pegged at either condition for an extended period of time, but these internals tend to be much more accurate, which would also fit with the Reversal process's typical rounding chop.

As for Futures, Crude has flattened out in line with the 10-min's negative divegrence. I wouldn't call the Index futures "telling" as far as intraday overnight signals right now. Es is virtually flat and not telling us anything short term...

 ES 1 min is virtually in line.

However there are some slightly stronger signals, although not screaming in NQ and more so in TF-Russell 2000 futures which is interesting given it was the best performer on a relative basis today.

 NQ in line as expected from the 1 min 3C charts of the averages pointing to this yesterday as of the close. However some weakness building in since the close.

TF/R2K futures also in line as expected intraday, but building in some weakness since.

I wouldn't call these screaming, but I am anxious to look at them in a few hours and will post an update if I think there's anything of significance. The overall indications short term are not screaming for a downside move tomorrow, but they are leaning toward it, while the bigger picture leans strongly toward market weakness evident in numerous leading indicators, market averages, etc and especially the SPY Arbitrage which I guessed at this morning based on price action and was right on. The larger CONTEXT model showing a 50 point over-valuation in the SPX today is also telling.

The one thing I'm considering is that Thursday's close is usually very close to Friday's op-ex max-pain pin, being this week we have a monthly op-ex max pain pin, I wonder how much influence that will exert on the overall close. Otherwise internals point to a close lower tomorrow, again in line with the choppiness of a reversal process, more on that here from yesterday...IMPORTANT Market Update

I'll check futures before turning in and let you know if anything is standing out. OVerall I still think we are right where we should be and progressing toward the anticipated forecast of weakness as the reversal process leads to the pivot.

However I'd consider the important implications few are considering or have the tools to consider, the $USDX and Yen signals, what that means to $9 trillion dollars in $USD carry trade and what that means to the markets given our Yen and USD forecast confiirm each other like no other divegrence I've seen in FX EVER!.

There are a lot of diverging elements such as Chinese macro data from Chinese markets, which FXI has recently warned about (3C) as we are seeing now as well as the Yen and Nikkei and the strange DAX futures vs the SPX today.

Have a great night. Time for some dinner FINALLY!

The Coming Post- Two Sides of the Market

Tonight's Daily Wrap will have a lot of very good information. Earlier today, the A.M. update was so thick with information (not the kind that you can get from CNBC, but what the implications are and what it means to us strategically and tactically) to get out on time without having missed a significant portion of the open.

There are two sides of the market offering very different opinions and while some of this can be explained, much of it cannot and it essentially puts us in the land of "1+1=3" which is a condition that can't last for long whether seen via earnings and the various tricks they play to make companies look stronger than they are or actual nations.

However, if I were to put this global "Tale of Two Tells" in to more familiar terms, it's no different that our watching price action vs. the often separate and contradicting tale of underlying trade. 

IN OTHER WORDS, THESE LARGER GLOBAL INCONSISTENCIES THAT HAVE SIGNIFICANT RAMIFICATIONS ARE REALLY NO DIFFERENT THAN A DIVERGENCE BETWEEN PRICE AND UNDERLYING TRADE CONDITIONS SUCH AS THE DIVERGENCES WE LOOK FOR IN 3C (what smart money or "big" money is really doing as opposed to what price action is doing). This is no different than Leading Indicators in which price does one thing and certain indicators that "should" normally follow price, fail to do so, once again giving us a divergent signal and an edge or opportunity.

These broader market events , macro data and news that are contradicting other things, are no different from divergence analysis. In any case, if you read yesterday's IMPORTANT Market Update and DAILY WRAP, then tonight's Daily Wrap should fit right in and make sense.

Tomorrow

As already posted yesterday in quite a large post, I suspect tomorrow the market will continue, likely to the downside a bit, but still within a range that is fairly tight and continue the reversal process as all indicators are falling apart to the degree that I suspect the reversal process will end this week, perhaps waiting for monthly option expiration Friday and in to the next leg, pivot down which is looking like it could be very serious as anticipated in April 2nd's forecast.

I think it's still a very rangey market to try to trade very short term and would rather use what we can to enter the larger swing/trending positions.

Leading Indicators

I hope you got a chance to see the last post and specifically the SPY Arbitrage and ES/CONTEXT Model as they or at least the SPY Arbitrage was EXACTLY as predicted earlier this morning without having had the benefit of looking at it, just based on what we already know and expect.

Leading Indicators, which are 1 of 3 very important indications for calling a pivot/top area (for the move called in the April 2nd forecast) where we want to open larger positions for the next leg before it actually starts and makers its turn, as this has been demonstrated numerous times to be the best entry with the lowest risk and highest timing probabilities, posted short term positive divergences yesterday in line with our very short term forecast for today which was the market bounce off yesterday's support as defined by numerous indicators, but visibly most easily observed, by the bullish Hammer candlestick reversals yesterday (which were weak in their own right overall, but enough for a green close today).

If you saw the charts posted yesterday for Leading Indicators or as they have been posted through this entire process, then today's move would be no surprise as they too were forecasting a very near term pop to the upside today, HOWEVER, they have deteriorated substantially since the April 2nd forecast followed up and started the very next trading day (A Monday after the 3-day Good Friday weekend holiday).

As shown last night, the important longer term view of these indicators since the market started to fulfill our April 2nd forecast the very next trading day which was April 7th, have deteriorated significantly.

Intraday today Leading Indicators were supportive as they were forecasting yesterday, but there has been deterioration in to today and more importantly on the larger view April 2nd trend basis/

Of particular note today is the SPY Arbitrage which tells us the market strength simply is not there without resorting to tricks to manipulate short term trade in the market.

Yields were trying to be supportive intraday, but overall lost more ground for our larger L.I. trend.

Pro sentiment was helpful around the 12:30 ramp as seen in SPX, but has deteriorated both longer term and intraday today significantly.

Commodities were also helpful to supporting the market intraday today as predicted yesterday, but again larger view in a bad place for the market.

Perhaps most notable is High Yield Credit which deteriorated on the day and within the longer term indication that means the most.

I'll update these in the Daily Wrap.

Market Update

Yesterday I drew quite a few example charts in this broad market update, IMPORTANT Market Update which contained the overall market's pinching volatility and shrinking range (I drew in numbers relative in size to the moves the represented),  as well as two examples of the reversal process that from day to day see the market act directionally, but when viewed as a process, usually only visible after it is complete, you can see the "Rounding" top which is one of two examples I drew yesterday or the otherwise tighter range or a reversal process. I also included the Market averages' example of the weaker than expected price trend of the last week and a half, from the actual post below...

"Here's the gain of approximately 2% in the SPX since the April 2nd forecast for a triangle-based volatility squeeze sending the market up in a highly directional move that is common to volatility squeezes whether price pattern based like the apex (point) of the converging trendlines of a triangle or whether from a Bollinger Band squeeze of volatility. As I said on April 2nd in the forecast, "It's the promise of a highly directional and future volatile move".

I'll admit that from both a forecast point of view and the opportunity to use higher prices to enter new or add to existing positions, the move has been very tame and not the upside breakout I anticipated. I'm still not sure or have a strong feeling whether this is just not completed yet, although all of the indications are suggesting we are in the end-phase or whether there has been such a change in the market's ability to rally based on the lack of institutional support as strong distribution has sent institutional money out of stocks broadly speaking, whether evidenced by SEC filings, 3C charts or breadth indications which don't lie and cannot be misinterpreted, they are like math, hard numbers, not opinion. Every move we have seen this year has failed far earlier and begun to see distribution far earlier than previous moves as recently as the last quarter of 2014."

This is the chart of the overall shrinking ranges through 2015, making short term trades very difficult, also from the same post linked above and the comments about this chart posted above.

Approx. size of each move's range and shrinking swing volatility from the same post linked, IMPORTANT Market Update

And one of several scenarios re: the reversal process, again see the rest in the post linked above.

Drawn in example of 1 of 3 scenarios in a reversal process, the point being they can be dangerous to try to trade short term.

Also as clearly posted in yesterday's updates and very clearly in the DAILY WRAP from last night, the 1 min charts of the averages either in line or positive such as these...

SPY 1 min in line as it was yesterday.

QQQ 1 min in line with a small intraday negative divegrence, but the point is in line or stronger as of yesterday pointing to near term upside today just like the daily closing candlesticks for the averages as well as short term leading indicator indications.

And IWM 1 min intraday.

Again, the point was, for a reversal process, the chart's strength on a 1 min chart gave a high probability upside move after yesterday's largely negative activity, which would be needed to create the choppy range associated with a reversal process.

However, additionally, there should be broad weakness in any thing other than VERY short term intraday charts such as posted yesterday in 1 min charts. Even as of yesterday, just about anything 2 minutes or longer was negative, in line with the short term bounce higher today, while also indicating broad weakness in the area, also indicative of a reversal process/top/pivot point.

Here are the 2 min charts of the same averages as posted yesterday.

SPY at 2 min leading negative

QQQ 2 min leading negative

IWM 2 min leading negative.

You really can't get any closer than that, 1 min very short term intraday strength for the next day (today) followed by broad weakness starting at the very next timeframe. Note there was NO positive migration in the 2 min n charts AT ALL today.


As for the intraday NYSE TICK (market breadth intraday), it trended as would be expected for a bounce higher today off yesterday's Hammer (bullish) reversal candles, even though they are weak in size and volume....

The TICK just after I posted the warning in Quick Intraday Market Update around 2 pm.

 The trend / Channel is perfect for the market action today, however like yesterday's short term "flameout" at morning lows , this afternoon saw something similar, but opposite which would best be described as a Channel Buster in TICK at the yellow area, which as you know with larger channel busters on 60 min or daily charts, nearly always break to the downside of the channel after breaking above, very similar in concept to a Crazy Ivan Shakeout.

And since there has been no improvement.

You may recall earlier today based on both the VIX action and the HYG support, I said I THOUGHT THAT I'D FIND THE SHORT TERM MANIPULATION OF THE SPY ARBITRAGE ACTIVE TODAY IF I HAD THE TIME TO CHECK ...

Well I checked...

 Approximately half of the SPY's move today is directly due to the manipulation of VIX/HYG and to a lesser degree TLT...the SPY Arbitrage (+$.60).

However, even though short term manipulation of the most common market levers has lifted the market today as anticipated yesterday because as I suspected yesterday, the market simply doesn't have the strength relying on institutional support alone... The Es/SPX E-mini CONTEXT Model based on numerous risk assets smart money trades vs the SPX, there's a deficit of nearly 50 ES/SPX future points on the day alone as you can see by the CONTEXT model below.


CONTEXT for ES.

Thus, the analysis of even the simplest indications of the averages 1 min charts vs anything longer than 1 min, is being confirmed by the models above as well as the 3 main indications I have been following, the 15 min. charts of the averages, the 7-15 min charts of Index futures and Leading Indicators which I'll up[date soon as well.

I'd say we are very much within the reversal process.