FED Minutes

I also should have put out my typical warning that there's always a knee jerk reaction to the FAD.

As far as the minutes, people see what they want. One site that has been predicting QE3 the entire year of course put out headlines about QE3 and put their spin to support what they have been saying is going to happen at every meeting so fr this year, but hasn't.

What the minutes said, read for yourself.

Here's what the QE3 crowd latched onto:

• SOME FED OFFICIALS SOUGHT TO RETAIN OPTION OF QE3, MINUTES SAY
• SOME FED OFFICIALS SAW QE3 AS 'MORE POTENT TOOL' TO SPUR GROWTH.
• TWO FOMC MEMBERS FAVORED `STRONGER POLICY ACTION' LAST MONTH

Here's some more balance (personally I don't find the minutes very enlightening at all):

“A number of participants saw large-scale asset purchases as potentially a more potent tool that should be retained as an option in the event that further policy action to support a stronger economic recovery was warranted,” 


Not a new revelation...


"Additional asset purchases would constitute a third round of so-called quantitative easing after the Fed bought $2.3 trillion in housing and government debt in two rounds from December 2008 to June 2011. Some officials said expanding the Fed’s balance sheet further “would be more likely to raise inflation and inflation expectations than to stimulate economic activity and argued that such tools should be reserved for circumstances in which the risk of deflation was elevated,” 


So like I said, people see what they want, but there's the balance that the site quoted above who obviously has a reputational dog in the fight, didn't provide.


All in all, nothing new. 

Killing Time

It seems like the market is just killing time until the 2 p.m. release of the FOMC minutes.

Since this pattern and this post "Patterns Predict" in which the ascending triangle was described as "way too obvious"

Here's what happened as you could have guessed, it's always what happens next with obvious patterns.

You can se volume picked up because this was being watched and became too predictable, at least make the volume rebate money while they have nothing better to do. There's another volume spike that has a long upper wick on the candle forming resistance, higher prices were rejected right there, that's why you see the little "mini-churning" episode.

 And now is the what comes next part of patterns predict...

That's the area to watch for a break and keep an eye on volume. We have about 5 mins until the minutes are released, we should see something a little more exiting then grass growing then.

Almost Forgot About This-Almost....

Price Patterns Predict

Just not how the books teach us.

This is becoming a clear theme and the NYSE TICK chart  looks like it could break this resistance level soon, it's now become way too obvious.

A Big Fat Duh?

That's what I deserve! I don't know why I didn't post the most obvious of all head fakes.

Right?

OK, I'm going to sit in the corner with my dunce cap for a bit.

Currency Anamoly

I pointed one of these out yesterday in the market, today there's one in USO.

 USO (green) vs FXE/Euro (red) 15 min chart

Here's the same on a 30 min chart.

USO is relatively flat and actually heading down a bit right now, The Euro went on to make a higher high, which means the dollar is lower. Being crude is priced in $USD, the price of crude should have adjusted upward for the decreased value of the dollar, but it didn't.

Really, keep an eye on USO, there may be an opportunity there.

Long USO? Be Careful

Be careful, at least until tomorrow before the Inventories report, another report we often find hidden signals in. This looks more to be FX related though, which has other market implications.

 USO 1 min taking a swan dive

 USO 2 min leading negative

 USO 5 min leading negative

 USO 10 min relative negative

 USO 30 min leading and relative negative

 USO 60 min leading negative

 SCO Ultra Short Crude-leading positive 1 min

 Leading positive 10 min

Starting to lead positive 15 min...

Act accordingly.

Early Market Update

 DIA 1 min no confirmation, relatively in line though.

 IWM 1 min-you already saw these charts, but the long view of the 1 min

 IWM closer view of the 1 min, looks like it wants to move lower soon, but wait for the end of the post.

 QQQ 1 min long view.

QQQ 1 min tighter view-similar to the IWM in leading negative. There is some decent red volume in the area as well.

 SPY 1 long view

 SPY 1 close up today, also leading lower.

 Above would be an ideal target for a head fake-a defined resistance level at SPY $122.

However even out of the range works, the red is the 1 day range, the yellow is the 2 day range, this is the idea of a head fake.

I'll keep you posted on whether $122 looks likely.

Morning Action

As I said last night,

"like I said, no victory laps yet.

The final nail in the coffin would be an upside head fake, whether the market can muster it or not, ????

It's not needed, but it happens about 85% of the time just before a reversal."

Wall Street is all about tactics, deceptions and fluidity. 

The market gapped up, something I mentioned last night quoted right above. Why?

Here's EUR/USD since the close yesterday to present, it's not so much a move in the Euro as it is a move in the dollar and as I suspected (rotation in the market's obsession) it's not as much about Europe as it is China and more specifically, the possibility of an American/Chinese trade war.

The Senate passes a bill addressing the weak Yuan, much to China's dismay last night.

ES futures were pushed higher in the short term on the prospect of a trade war, which in the larger scope, would be a nightmare scenario for the market, but in the short term/overnight, pushed the dollar lower.

Here's some 3C ES charts

 Here's the 1 min chart and the start of the ES ramp

Here's the current 5 min ES

As for the SPY extended trading

The light shade is EX trade on an hourly chart... interesting.

So we'll let the a.m. trade wear off and take a look under the covers. A move higher was something mentioned last night as something we see as a head fake about 85% of the time before a reversal and we did have a tight trading range all of yesterday and even Monday could be included so does this bother me? No, the conditions last night didn't seem likely to me if you read my post last night, but as I said, we see it about 85% of the time, so it's not surprising either.

A Special Day