Same As Yesterday

Yesterday volatility up and down and back up was all based on articles pointing to the F_O_M_C doing one thing this week (sent stocks up Friday/Monday) to the next article that had a move hawkish tone which sent stocks down yesterday, then the same writer of the previous article cast doubt on his own article in a blog post a few hours later sending the market back up yesterday afternoon.

There's nothing specific that I've seen, but apparently the word on the street is this F_O_M_C meeting is not to be feared.

I think things are going to change intraday soon again, but for a similar reason to yesterday, initial divergences in intraday timeframes were run over for F_E_D sentiment.

Her are some examples, then I'll show you the newest charts that shed more light, that really do look like the market has to come down in the next 45 mins.

Oh and by the way, the SPY arbitrage model is $.80 negative, meaning it expects the SPY to come down $.80, this happened with ES yesterday nearly to the dollar.

The Yen (green) vs SPX inverse correlation that has been so strong, is totally distorted today and the market is rising here when it should be falling, at least for now.

 USD/JPY 1 min, a large negative and like yesterday a smaller intraday positive holding the market together a bit longer.

 ES with a decent size negative, then 3C moves higher with price, but there's no positive divergence reversing the original signal so in my view this move is a house of cards (since the intraday negative).

 CONTEXT came down to reversion yesterday after being about 18 points lower than ES, right now it has started again with CONTEXT about -12 points lower than ES

And the TICK chart appears to be breaking.

I have other charts of interest.

XLF July $19 Call P/L

With the market still opaque near term, more importantly BEFORE tomorrow's 2 p.m. F_O_M_C, unless I have clear visibility, I want to reduce my leveraged holdings, even though certain ones I will add to as they have strong signals.

XLf's chart with the market charts as well as the USD/JPY just made this the right time to take the position off the table-thank you volatility.

The 3 min XLF (Financial Sector) chart speaks for itself. There's a difference between speculating and taking risks (which is exactly what we get paid to do) and just rolling the dice, gambling. If you aren't sure what the differences are, you need to email me and we have to have a serious talk about probabilities and risk management- don't be embarrassed, I don't look down on anyone and there are no dumb questions...(just dumb people--- :) I'm just kidding, really).

Honestly though, if you feel like what you are doing is no different than rolling dice, lets talk.

At the $.95 fill, XLF came out to be a winner of nearly +21%

This also puts the model portfolio up quite a bit since our hit and run tactics.

Adding Some GLD July $132

I think this works as a new position as well as a 2x leveraged long. I'd prefer to add near $131.50, but that may not be in the cards.

Closing XLF $19 Calls Now

GLD Update

GLD's move lower today looks a lot like a stop run or head fake move...

With the USD/JPY and the averages coming down, we'll find out soon enough, but needless to say, I like GLD long here for a quick trade.

 GLD stops hit this morning.

GLD 2 min still positive even after that or I should say, especially after that.

3 min positive

5 min with a huge leading positive divergence.

Market Charts...

The USD/JPY is finally coming down, the market with it. GLD may get a boost here, I'll post it next

 DIA 3 min leading negative

IWM negative

QQQ negative

SPY negative.

FSLR Follow Up

In the very near term, intraday, I think FSLR will come down a little more, but I really like it, even here. I prefer July Calls, but this can probably be played as a long equity position as well.

Here are the charts that matter, it's one of the best looking longs in the market right now.

 3 min

5 min

10 min

15 min

30 min

I'd prefer to add to or start a new position when the market looks to be in sync, but I still like this one quite a bit.

Quick Update

The market looks ready for the first downside reversal today, we'll see if there's any information there.

Early Update

First, it's pretty rare to have this kind of opaqueness in the market, but it's not unique, it happens from time to time until things come back together and I've found it's just a matter of patience, the causes can be numerous depending on market conditions, but eventually they all line back up and we have a clear edge again, I don't want to step in front of the F_O_M_C bus without a clear edge.

Market averages this morning are all over the place, but I don't trust any upside right now, I "think" there needs to be some repair work done from yesterday so as of right now I consider them useless.

The only thing sticking out early is the 3 Arbitrage assets, HYG, VXX and TLT and even there we have some discrepancy, but I think this is the clearest thing we've probably seen this week which isn't saying a lot.

HYG- High Yield Corp. Credit... This is a risk asset, when it moves up or accumulates strongly, it's a signal the market is likely getting ready for a move up. This fell apart badly yesterday so I closed two Call positions and opened a put.

This is just the 1 min chart, it shows the repair process started late yesterday, still only 1 min. Here's a closer view...

1 min HYG

The 2 min is trying to follow, but it still needs some work before it can even be considered reliable.

The 3 min isn't anywhere near the other two yet.

XIV is the opposite of VXX, it trades with the market so this is a little interesting.

 1 min positive, yesterday this was probably the most positive of assets on the risk side in general.

 XIV 2 min looks decent

5 min looks pretty good

The monkey wrench is TLT, remember though these are 20+ year bonds, if the F_E_D tapers, they mess with the long end and anchor the short end so to see some anomalies here before the F_O_M_C tomorrow isn't unexpected, but as of now, it contradicts the two charts above, I feel this is definitely directly F_O_M_C related.

 1 min positive would suggest TLT moves up, that would send the market down in most cases.

TLT 3 min is seeing some strength as well, but interestingly it looks a lot like HYG and they are polar opposites so once again, I think this is very much F_O_M_C related positioning before 2 p.m. tomorrow.

When the averages start to show some consistiency, then we'll be closer, that could happen after a.m. trade, it may take longer. We'll just have to be patient until clarity returns and with that, our edge.

Pre-Market

Hopefully today we will get some real, clear signals in the market. There was an element of randomness in the overnight session, China with rising Housing inflation and a systemic cash crunch tying the PBoC's hands, the RBA saying there could be further weakness in the Aussie, Europe was a bunch of bad news from German car sales to rising Spanish bad debt, yet ES moved up overnight, perhaps the bad news is good news "F_E_D theory"?

There's a little softness in ES right now, although 3C looks to be fine, I do expect some repair work needs to be done from yesterday, maybe half or 1/3 of the day would do it.

The USD/JPY looks toppy intraday right now above $95, so that is probably causing ES softness, I'd expect softness in the a.m. market. The individual currencies of JPY and USD confirm the same, USD/JPY and the market should come down early in the session, we'll see if we still get accumulation of lower prices or not, (lower than ES pre-market), I expect we do as the F_O_M_C starts today.

I still like Gold for the very near term so I'll be watching that closely, other than that, we're just being patient until the market reveals the course in the near term.