Sunday, March 17, 2013
The opening futures is where the damage was done, the S&P futures to 1 week lows and Gold Futures to 3 week highs, this is exactly what I was talking about in the context of Credit which took a dump Thursday and Friday, when the market speaks, listen because all it takes is a day to erase everything.
The HY Credit chart we had been following the last several days as part of our leading indicators proves, it doesn't take much to erase a lot of gains in a short period as fear always trumps greed and markets always fall faster and harder than they rise.
HY Credit vs the SPX, tracking together all year and then erases all 2013 gains and then some in 2 days.
So far as mentioned above, the damage was on the open, now there's a bit of wait and see what happens next, but I think the precedent set, the peak in to how far the Eurocrats are willing to go is more than enough to spook the market and certainly more than enough to cause European Financials incredible pain as they are about to see a bank run like they've never seen before-get ready for news of bank "Holidays". Financials have the power to bring down the house of cards, think back to Lehman.
So far here's what we have in the Market Index Futures...
ES 1 min with a slight 1 min positive divergence, this means almost nothing as Europe hasn't even opened yet, just some profit taking I'm guessing or perhaps a VWAP reversion driven algo as we saw that earlier.
The ES 5 min chart with distribution in to last week's highs (buy low/sell high) and the extent of the drop on the open of futures this week.
NASDAQ futures are down big as well, no signals there, just trading in line for now.
The 5 min NASDAQ futures showed distribution in to Friday's highs.
As I have been talking about, the Russell 2000 Futures have shown a strong negative divergence since last week.
The EUR/USD daily with tonight's open
The 5 min back under the $1.30 ECB stop-gap
And over the last several times under $1.30, we have a lower low in the pair.
Abe has got to be nervous as the Yen gains against the Euro
5 min EUR/JPY
EUR/JPY, not good for Japan and certainly some carry traders are feeling quite sick tonight.
USD/JPY is even showing weakness even though, as forecast, the $USD would be the safe haven currency bought as you'll see in single currency futures, this just shows us how bad the Yen is moving up as we have suspected for weeks.
Euro single currency future is down and trading in line on the 1 min so far.
The 30 min Yen chart, despite everything the BOJ is expected to do and Abe has done, the Yen is appreciating and Abe is not appreciating that scenario, nor are any Carry traders with a Yen cross.
Here's what I meant, the 30 min $US Dollar Index which has been positive and the currency I figured would be bought, has been bought, despite it being down vs the Yen, that just shows how much the Yen is up.
Dollar Index 5 min with positive divergences late last week, add that to the list of strange things we saw late last week.
Even stranger maybe, our long GLD options hopefully hold up overnight as Gold futures jump on a richer dollar, whoa!
If anything changes in the futures before i turn in, I'll let you know.
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