Volatility, VXX, UVXY and XIV

I capture the charts for all 3 earlier for the Leading Indicators post, which is a long post with a lot of charts, I haven't been able to get to it so I'll re-capture the charts and put out a new one, but at that time when VXX and UVXY were still pulling back, they had nice positive divergences in them, so this move in volatility looks solid and tends to confirm the move in the market.

Still holding a VXX position and UVXY trading position-both long.

AAPL Charts

Starting from long (bigger picture) to short (more immediate trade)...

 AAPL 2 hour long term chart showing strong distribution at the September top, we finally have a base, but it doesn't look fully developed in my view and from other charts, perhaps another bottom to make a "W" shape or perhaps a pullback to fill the gap around $434-$436.

 The 60 min chart is leading positive too so this looks interesting, I personally don't want to chase AAPL, especially with the short term charts looking like a pullback is coming, but perhaps after a pullback if the charts are still strong, AAPL may be a good long for a bit.

 Note at 30 min the divergence is sequentially getting smaller and smaller

 At 15 min AAPL is simply in line, it's not even positive anymore.

 The 10 min chart shows a positive accumulation base area and a move from there, although AAPL charts have been very spotty, this is the first time thy are clearing up, however the move out of this base looks like it's being sold or having profits taken, I'm guessing to form a larger base.

 Now from the intraday 1 min to meet the 5 min chart as this is the most recent trade and migration of any new divergences. The 1 min is leading negative now after this parabolic move.

 We look for the divergence to migrate to longer charts, the 2 min is relative negative

 As is the 3 min

And meeting the 10 min above, the 5 min is lading negative.

This tells me the probabilities are for a move to the downside, from there we'll have to see what develops, but I wouldn't make this a larger short, more speculative because of the longer term charts and the probability of some sort of base that still has gas in it or will be fueling up again.

AAPLTrade Idea

AAPL is looking really close to being a short, at least for a swing type move, perhaps a bit shorter, after that it looks like it may be a decent long finally, but I do think it pulls back.

I wanted to get this note out so you'd know now, charts will follow next, I'd definitely treat this as a speculative trade with everything going on and the longer positive divergences.

GLD Update

Looking at the GLD charts (I haven't checked the $USD which will be important) I'd like to sell in to the next momentum move in GLD and then look for a new entry as I think it has more to go on the upside, but I think a pullback is highly probable first.

 GLD 1 min is seeing a late day positive divergence, it is building on several timeframes as well

 GLD 2 min positive toward the afternoon

 3 min leading positive

 5 min moving toward leading positive from a earlier positive divergence

 The 10 min is where I'm not impressed and why I'd like to sell in to the next momentum move and look to reposition because of the next chart.

The 15 min is leading positive, but more importantly it looks to have a decent size base that hasn't even broken out, I'm thinking one more run, a pullback and then a move toward a breakout, I'd want to establish a new position before that breakout and perhaps even use les leverage.

Market Update

This has been a strange market, no one could argue otherwise, I'll show you leading indicators and you'll see how some of the CONTEXT magic was pulled off, but the closing indications will be what really matters.

There hasn't been a huge groundswell movement in underlying trade, it seems it has been positive enough to recoup the gap, but doesn't seem to be moving in to those midterm charts I've been watching all day. As far as the market action and the gap, as I said earlier, this thing had to be pretty hush hush to avoid a bank run, they waited until the markets and banks were closed and waited for a 3-day bank  weekend, which at last I heard was going to be pushed out at least until Thursday, I'll have to double check, but if you are a market maker, specialist or the new version, an HFT, you are in big trouble holding inventory when a 2% gap comes, you NEED to get back to fill that gap to unload your inventory which you keep in stock as part of normal day to day market making operations, I doubt many of these guys had a heads up and if they did (say at Goldman), I'm sure they were promised "We'll get you back in to the gap", why else would accumulation be so heavy on the open? I'd be willing to bet the market makers who knew, knew they'd be promised the opportunity to buy at the lows, move up to the gap and unload inventory, making quite a bit of money in the process if they just wouldn't do anything that was going to give away a deal that I'm sure Goldman would profit from.

 Here are some market charts, then hopefully leading indicators will make more sense.

 DIA 3 min is deteriorating

 DIA 10-min thus far hasn't done anything interesting and this is where I was watching for a move.

 IWM 10 min is as close as it gets with an in line chart, but that's not positive flow.

 At 15 min there's no doubt there wasn't any heavy movement in underlying trade to the positive side, in fact, it looks quite the opposite.

 IWM 3 min, closer to intraday trade is also negative

 QQQ 2 min intraday is negative, it will be interesting to see if this divergence really migrates and becomes much worse, then I'd almost be willing to publish an article in the WSJ about how money buys silence.


 QQQ 5 min is going negative

 SPY 3 min intraday is going negative-*Note you don't have to fill the entire gap if you accumulated heavily on the open and who would have done that without some assurances?

SPY didn't make it past 5 min here so there was no massive change in the middle, the area I was most interested in.

Futures are going negative-especially R2K

Futures Update

There's so much data out there that I think to really look at it, it would take 24 hours just on what we have today.

Despite the market, which seems to be following an algo arbitrage (and this needs more investigation, but CONTEXT makes it look very apparent) and is behaving better than you might have expected as of yesterday...

 CONTEXT ES model vs ES (S&P futures) is running darn near perfect, this looks very much like some correlation driven algo.

The ramp in the EUR/USD back toward the ECB sanctioned floor in the pair at $1.30, just failed, but it has been more than enough to lift futures and stocks overnight and through normal trading hours.

Things would seem "Hunky-dory" (if that is how that is spelled?), however the flight to safety remains, you can't have a risk on posture and a flight to safety at the same time.one or the other is deceiving and you know where I come down on that one.

In any case, as of noon time EDT, the Swiss (typical flight to safety) 2 year rates were hitting -.05 which means those buying Swiss 2 year notes are more interested in preserving capital and are willing to take a negative ate of return to do so than they are in participating in stock purchases or other risk assets (of course money could be coming from all sorts of places including European bank accounts).

While I haven't had time to get to it, there's more to the growing Chinese inflation story as well so we are also seeing a flight to the safety of Gold.

So as the market does its thing and makes the day look like things aren't so bad, we have other metrics showing there's some money running scared, willing to accept a small loss to avoid taking a bigger one (negative rates of return on Swiss 2 year notes) and a move in to gold, which I would still love to se a nice momentum move to sell some of the April GLD calls in to.

Since CONTEXT is so incredibly close to ES, I'm going to take a look at leading indicators, although I suspect I already have an idea what I will find...

GLD Catching Another Bid

 GLD 1 min positive

 GLD 5 min positive

EUR/USD looks to be going negative after just testing $1.30

There are more charts I wanted to include, but we are moving fast.

Charts

As a quick update, the intraday 1 min Futures for the SPX (ES), NDX (NQ) and R2K (TF) are all turning quite a bit more negative, leading negative.

 SPY 1 min -all the charts were VERY leading positive on the intraday 1 min chart, most saw a mild negative that led to a consolidation (remember they can happen through price or time, this is through time) and a negative at the intraday highs, but these are NOT extreme or big moves.

 SPY 2 min showing the weakness seen the last few days of last week, but very clearly, today's chart is relative negative, still not a very strong signal.

 The 3 min chart (and this is where it STARTS to get interesting) is in line, slightly leading, what happens from the 5-15 min timeframes is what I'm most interested in moving forward.

 The SPY 5 min from leading negative Friday to in line and slightly leading positive today

 This is where the real damage is and why volatility becomes an issue, the current area of the 30 min is in a leading negative divergence as we are near the highs. I think I explained this last week as being like a very thin limb, very extended; it is impressive, but once it cracks it breaks hard.

 Dia 1 min very positive on the open, intraday negative at the highs.

 2 min showing the same weakness as the SPY above, not positive today, but also not making a new low in 3C.

 DIA 3 min is quite negative last week, part of the reason a new IWM April Put position was opened Friday, a very strong positive on today's open and a relative negative divergence, all in all, very mellow today considering.

 DIA 3 min, saem theme

 DIa 5 min, same theme, weakness last week, very strong open and a relative negative right now, but not anything extreme at all today.

 This is that thin branch again out at the 10 min DIA chart, leading negative, this is what makes any crack in the market very dangerous.

 QQQ 1 min, consolidated earlier off a positive open and is in line intraday.

 QQQ 2 min a very slight relative negative divegrence

 Same with the 3 min, what is impressive is the opening positive divergence

 QQQ 5 min with a very weak relative negative divergence, the weakest negative you can really have.

 The 15 min is where more serious trouble is and this is where I want to see what develops.

 QQQ 30 min leading negative, this is the kind of chart I'd look at and say, "The fate of this market is already sealed, it's just waiting for the DOA certificate".

 IWM 1 min very positive on the open and in line intraday

 2 min IWM very negative Friday (that's part of why a new IWM April Put was added) and a leading negative, I'm wondering if this is an anomaly or real.

 IWM 5 min chart would suggest real

IWM 10 min chart and some chronology, still a lot of damage to overcome just to get past 10 min.

Futures coming