General Market Update

This is still a VERY strange market, it almost looks like an extreme case of rotation in a healthy bull market, for instance the IWM which tends to lead risk on moves, at least healthy ones, continues to improve.

The QQQ is ambiguous at best.

If I were to view the SPY alone, I'd probably still have Puts open, it doesn't show much of anything positive like the IWM, which I will remind you is still just in the intraday stages of positive signals, but they are building.

The DIA, the one I expect the least from, looks just about the same as the IWM and on certain charts even a bit better.

This is the craziness I'm trying to navigate and none of the arbitrage assets that usually are so good at confirming one way or the other, are pretty dislocated from each other, if they are not correlated between themselves as they normally are, they serve little purpose for our needs of confirmation, instead they cause a more complicated situation in which I'm trying to understand what is F_O_M_C related, what is a reach for protection, what is hedging longs and what is moving out of risk altogether.

I'm still working it, but today is a real job and a half.

I will remind you though that we have seen F_O_M_C tells before, obvious leaks just hours before the release and we have seen earnings leaks like GOOG that developed literally 15 minutes before earnings. Even yesterday the IWM put idea came late in the day and worked as the short term trade it was intended to be so I still have hope, I just need to pay attention to details, again for that reason, emails will be difficult to respond to in a timely fashion.

FSLR Also Looks Good

Again, "If" I had room, I'd gladly add to the FSLR call position, this is probably even a decent long equity position.

I'll keep a close eye on them both, but I'd say as soon as the market is in shape, they move, they may even lead, especially AAPL.

AAPL

I hate to do quick analysis like this and not post charts, but for me, IF I had the room, AAPL long or calls would be an add to right here, right now.

I'm looking at FSLR.

Market is Still All Over the Place

Take a look at the IWM, it looks like it is starting to repair some of the damage that started in 3C yesterday and was the reason for the puts, this is also why I thought closing them right now to be the best solution, it's really more about taking unnecessary risk off the table as I WOULD NOT enter the puts right now, yesterday when we did, yes, but now, no.

 IWM 1 min looks to be starting to find support

IWM 2 min also shows the same

As does the 3 min, note the time when it was negative yesterday afternoon and how it looks this morning, this is why I couldn't keep Puts open.

The 5 min chart isn't there yet.

Interestingly or frustratingly, every average looks different, the SPY doesn't look as positive as the IWM, but it didn't see the same move down either. The DIA looks a bit more positive in most timeframes, at least from 1-5 min. The Q's don't look positive in these timeframes at ALL!

That's the reason for the quick move this morning, you can also see what chaos the market is in and that's just the start of it, it really looks like a lot of people are going in all different directions, even different asset traders such as equities vs treasuries/bonds.

As for GLD

I think VERY short term-intraday GLD will come down, I'd consider closing near term expiration calls, July calls may be fine.

Let me show you what I see right now and GLD is very F_O_M_C sensitive.

 GLD 2 min is still in line, there is however a gap just below from today of course, so directionally we were right on.

This 15 min chart suggests GLD will see a fairly strong move ahead, this could be quite a bit ahead, like weeks, but there's still good chances for closer term moves to the upside.

As for Gold futures.

It's this 1 min that has me concerned immediately, perhaps a gap fill?

The 15 min chart is improving and positive.

As is the 30 min, I believe yesterday was Gold's near term bottom, we should see upside from here, but it will be choppy. If you want to try to play more of the trend, then I might suggest a 2x leveraged long ETF

The Last Decision

I know that was quick, but I suspected they'd be short term, I don't feel they were worth the risk with TLT taking quite a quick nose-dive and VXX, etc looking like they will see a sharp near term upside move.

Once you lose the momentum in options, you start losing the profit and I didn't want a loss.

Right now option positions are essentially flat.

The ETF's entered yesterday are still active as they won't experience the same degree of draw down, I have more space and time to be more patient.

I'll bring you more shortly, but again things are moving very fast, it almost seems like Wall St. itself is unsure of what to expect which would surprise me so I'll keep looking for their foot prints.

Closing All Puts from yesterday now

Market Update...

This is a fast moving market, it will continue or get worse.

I think some of the last two day's optimism will be unwound before the policy statement, it looks to have already started, but we seem to be at a brief pause.

 This is the ES 5 min chart, this looks like it has to unwind some of the upside, CONTEXT is -12 points below ES.

The 1 min IWM

The 5 min IWM, again near term it looks like an unwind is likely.

However, as you see on the SPY 1 min chart, there's some intraday strength to the right, it's small, but still there. The more important chart for direction is the 5 min below.

SPY 5 m. Leading negative.

HYG has a lot to do with this...

There's a move up this a.m. from a 1 min positive divergence from yesterday, but it doesn't go much beyond that.

I think the downside this 5 min chart forecasts will have to be realized, the market typically moves with HYG, actually HYG typically leads the market.

VXX, UVXY and XIV all taken together form a composite picture, there's a tiny bit of intraday strength, it may be a SPY Arbitrage attempt, it's not showing up yet on the SPY Arb. chart, however they are all very clear now in the 5 min space, they suggest the market moves down as do all the charts above.

TLT is still sloppy so it's hard to make much out there.

I will stay patient, but busy looking for signals. For now, I'm holding everything in place, most of you should have profits from yesterday's positions, no one can blame you if you chose to take them before a wild card event like the F_O_M_C and worse after that the Bernie Press Conference which will send volatility soaring yet again today.

The market is ready to come down

It looks like fast and hard too, so get ready to take action on some of yesterday's positions.

Pre-Market

You'd really think the biggest story overnight would be the F_O_M_C, but it's a continuation from last night and the night before, CHINA. What is known as "Hot Money", excess liquidity produced by the F_E_D and the BoJ has to find its way in to some market to try to generate a return and that market has been China, because China already has an inflation problem they can't fight back by engaging in liquidity providing/QE operations, in fact they are doing the opposite and draining liquidity from their system to soak up all the extra cash sloshing around driving housing prices to crazy levels.

It seems this has become a brewing crisis and this is the real reason China and Japan have been at each other's throats overtly, but over seemingly unconnected events like the Senkaku Islands which are little more than rocks in the East China Sea, well whatever sea it is depends on which side of it you live on.

The CNY benchmark money-market one-week repo rate was 138bp higher overnight to a 2 year
high of 8.15%. The 7 day Interest-Rate swap rose for a record 13th day in a row jumping +10 bps to 4.08%, the highest since September 2011. China sold 10 Year bonds at a 3.50% yield, above the 3.47% expected, and at a bid to cover of 1.43 which was the lowest since August 2012. Moody’s commented that local government financing vehicles (LGFVs) pose significant risks to Chinese banks. LGFVs
accounted for 14% of loan portfolios at end-2012 according to Moody’s.

As for ES overnight, one might say, "Slightly Cloudy with a Chance of Rain", a very choppy session overnight. The USD/JPY is stuck in the same chop and looks more likely (stronger signal) to go down in the immediate future as in before the F_O_M_C or around that time.

That means the market should follow.

Bloomberg shows the F_O_M_C announcement as being 2 p.m., but often that is the press conference with the announcement at 12:15, I'll have to double check their schedule, all I can say is make sure your computer is cleaned up, your browser fast and be ready to move quickly.

More than anything, REMEMBER ELMOST EVERY F_O_M_C OR F_E_D ANNOUNCEMENT PRODUCES A KNEE-JERK EFFECT, IT IS STRONG AND CONVINCING, BUT ALMOST ALWAYS WRONG, IT USUALLY SHIFTS WITHIN SEVERAL HOURS TO A COUPLE OF DAYS.

This is where 3C will be most crucial. One time we found a leak 2 hours before as smart money all shifted 2 hours before, I'll be watching closely which means I'll probably be slow on email responses.

Good luck, stay frosty.