What a difference a day makes... not really.. but the Spooz did belch lower through the all important 1510 level in the minutes before regular session closed today.

SPY vs TLT . note cross

 Around 2:40pm we the SPY TLT spread is compressing following the trade into 1524.50 (the exact high from monday before we collapsed 40pts).

"We have a good rapport with them…We like them."

"If you look at his record lately, he has made a few very big mistakes. I am not going to say just this one…I look at it as a great opportunity. Ironically, I thank him for giving it to me. Does not mean I like him."

1 min ES

Around 12:15 ET the $SPY diverged with conviction from the price of $TLT. Notice how this divergence was the precursor for the ES trading into 1523.50 highs.

The morning session saw prices upward though much all non directional chop came during the 1 hour from 11:15am till 12:15pm as TLT and SPY prices were touching each other.

5 min ES

15 m in ES

 Whats up Wednesday? The Spoo... Much hubbub was made about the 'out of nowhere' rally today, though in my humble 3cent opinion trading could not have been easier today.

A major pair trade between the 10 and 30 year bond and the SPX/ES_F provided the current to ride if you were so inclined to catch the wave with you longboard.

5 min ES

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S&P 500 futures are little changed @ 1493 +.50 this Wednesday morning, though per usual; bond futures are higher.  Yen strength is weighing on the commodities and equities, currently the EUR/JPY cross is lower by 0.77 percent.

5min NQ

Nasdaq futures are little change as well @ 2711.25 +3.50 with support at 2705 and resistance 2713-2720. Under 2705 means a test of 2700 again, likely will fail; over 2720 = 2744 next resistance.

15 min ES

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The S&P's meandered back to the 1497.50 level after the 1484.75 level held during the AM hours twice. This slow conversion of 1485 into support provided enough information for you to lean off on the level into the long side in anticipation bonds and DX would relent a bit; they relented. a bit.

PURPLE line is GC Overlay of SPX on a weekly time frame

The price of gold has not converged with the price of the S&P 500 (SPX) since 4/26/2010 and it was not until 2/18/2013 (SPX made 5 year highs 1530.94 this day) where the price of GOLD was just 23.36 points away from convergence with the SPX. The price has diverged 75 points since last wednesday..

On 4/26/2010 the SPX price was 1219.80 and the SPX fell to 1010.91 on 6/28/2010 following the FLASH CRASH turmoil.

THUS what i am saying is.. If gold continues to diverge from this NEAR 1st convergence in 2+ years equities could snap to >1400. which would be a excellent area to dip toes into risk.

5 min ES.. showing highs & lows

Mutual fund monday turned out to be a day of mutual selling..... What drove the tape today IMO was not so much the Italian election results and the possibility of gridlock in the Italian Senate but was a tsunami of flows into bonds coupled with YEN/DX strengthening.

SPY vs TLT.. look at this divergence... into the close we got max divergence.. means tomorrow things going to be very interesting..

1 min daily spy vs tlt

5 min ES

The S&P 500 consolidated under the 1505 level providing us with no fresh data to build upon for tomorrow beyond the fact 1500 was regained and is currently support on the 5 min.

The big driver behind failure of 1500 today was DX & bond strength from the open till close ultimately sending the ES to a low of 1495 before buyers stepped back into the tape.

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You know already the entire risk complex reversed lower today marking the largest single day loss of 2013 to date as The SPX declined 18.99 points or -1.24% to close at 1511.95, the NDX declined 42.8861 points or -1.54% to close at 2739.9893.

As mentioned in the TFP morning letter the precious metals market was extremely heavy, specifically gold which was already trading @ 1585 by 7 am. Commodity weakness was the initial indication today might be the day where downside S&P 500 supports are taken out.

5 min CL

 Not sure what the catalyst is here but rumors of a commodity fund blowing out are circulating.

That being said the collapse in CL coincided with the DX breaking over 80.73 resistance, so you could argue DX strength preceded this drop. IF crude breaks under the 1/17 low of 94 it could easily mean we see 92.

Via our TFP Insider service we signaled a short @ 96.78 and was looking for 95.80 if 96.50 support gave way, which it did.

5 min ES

Overnight Musings
That was quick, ODP buying OMX for $1.2 billion; and we have gold below the 1600 level as the stair step lower pattern continues as macro data improves.

 Fueling the equity bid are the 613,000 U.S. single-family homes started in January, the most in more than four years. Housing starts dropped to 890,000, less than forecast. 

5 min ES

Tuesday turned out to be a rather constructive day with the most notable price action being the final hour breakdown in bonds which coincided with the ES trading into regular session highs of 1528.75. The spooz went onto trade 1529. The SPX closed @ a new 5 year high of 1530.94 +0.73%.

Support in ES is now 1525 with 1520-1515 being a air gap. 1510 remains the line before 1500-05 air gap becomes the trade. Over 29's = 35.

5 min ES

Overnight Musings

Coming off the holiday weekend and a positive German consumer sentiment reading, the S&P 500 futures are higher by 3.50 points to 1520.50 after support held at 1515.25.  Resistance for the ES remains @ 1521 followed by 1522-25, support under 1515.25 is at 1514-1510.

Daily UB

Back in August we touched on the topic of the UB which was showing signs of weakness up around the 163 level just as equities were gaining footing while the NDX traded near 11 year highs...

(original post) "Where is the bond cash going? not sure yet, but something is keeping the indexes bid as we consolidate..... 

below 163'03-163 even could mean a drop into that lime green box you see below.. this area has not been visited since bond prices started to jump a the end of March/beginning of April 2012... clearly if the green area becomes the range the 146'12 level becomes major support... a break of that would mean 126'18.... 

i would be wary of a bounce around the 163 level, just as i would be aware it could fail."

That being said..

take a look @ the weekly chart below and daily chart above, the 163 level gave way to a 11 month low of 154'18.. The current UB price is 155'28... About the cash which came out? volumes were significant if you look especially at the week of 11/26. -chart after jump.

in 25 minutes the asteroid will pass @ 25k miles per hour and will be 17k miles from earths surface.

5 min ES

Overnight musings

Ahead of the three day weekend the ES futures are lower by 0.75 points to 1517.75 with support at 1514.50.  Nothing much beyond some currency movement happened overnight which helped carry bonds into highs and aud/jpy into lows as the yen strengthened overnight.

The Euro is lower after popping and dropping from over 1.3375 down to 1.3308 up to 1.3356, quite a bit of movement especially considering how far the euro has fallen in the past couple days. Under 1.33 6E its lights out.

Check the pocket created off open.... bonds continue to fall as equities continue to rise.. when this divergence starts to close.. its time to get out of stocks.. so far.. still widening.   We been talking about this for a few weeks now.. 

1 min

15 min ES_F

The market gods provided you with a interesting session for this commercial holiday of V-day. What made today interesting?

The fact we had bonds dollar equities and crude all higher on the session, the SPX closed on a new 5 year high of 1521.38.
ES settled around 1518 after trading into 1520.75. 1522 is the 2013 high.


Absent from today? a crush of equities despite a nearly 1% move in bonds up from their early Thursday morning lows.

15 min ES

Jobless claims - 341K vs 360K 

A similar scenario to yesterday morning is playing out in the complex currently as the S&Ps are down 5 points to 1512.25 after trading as low as 1510 which makes 1510 the line in sand to watch. Resistance is 1517.50 under 1510 its 1505. Perhaps today will be the day we come off a bit.

NQ futures failed the 2765 level to fall into 2756. Looking at the chart on the right you can see how large the volume was when the CYAN line i pointed out last night failed.. Pretty funny the line fails for the first time AFER i write about it. Currently NQ is lower by 9 points @ 2761.25. Under 56 sell stops over 66 buy stops.

5 min ES

In typical fashion the market meandered today between positive and negative territory with the median price being 1516. On the positive side of things you had the YM futures trade over 14,000 this morning placing a new high for the year @ 14,006 -

BUT that did not last long as the futures vommed all the way down to 13,920 before bouncing 40 points back to 13,949.

5 min ES

OVERNIGHT MUSINGS

Following last nights uneventful state of the union speech by our president and chief the S&P500 future are higher to 1519.50 a gain of 3.25 points as support @ 1516 held throughout the morning. * correction 1520 just traded as i was writing this.

This makes 1520 resistance and 1516 support, under its back to 1512 over anybody's guess but likely slow grind nothing explosive over 1520.

Bloomberg News reporter Greg Farrell pored over transcripts of depositions by SAC’s founder and its general counsel and used confidential sources to report exclusively that the hedge fund’s email deletion policy in July 2008 had hindered U.S. investigators in their probe of insider trading.

Tuesday turned out to be nothing more than consolidation under a new 2013 and 5 year high for the spooz of 1518 and 1519. Currently the ES futs are +1.50 points @ 1517.75, NQ futs are higher by 4.25  points @ 2765.

1 min ES showing entire night/day/evening price action

Goldman Sachs CEO Lloyd Blankfein spoke with Bloomberg TV's Stephanie Ruhle at the company's technology conference in San Francisco today.  Blankfein said he has no plans to leave Goldman: 

"The combination of this being who I am and what I do and having absolutely no other interests makes me think this is what I'll be doing for a while."

Mr. Blankfein goes onto say..

"would love to be wanted" for the role of Treasury Secretary, "that seems like such a distant hypothetical." 

5 min ES. note the 1515 level

Overnight Musings

The futures looked pretty awful @ 1 am, and now.... they look stable with crude making a new high over 97.40 while the ES , down .75 points.   Support in the ES from overnight is @ 1508.75h with 1510  being the line in sand off the open.

The ES upside line is 1515 over this level as we mentioned last night will surely mean a test of 1517 is in the cards. A break under 1508 means a move back to 1505.

ES 5 min Zig

Today the S&P consolidated in sideways fashion over the 1510 level with the immediate resistance @ 1515 with the new 2013 high being 1517.  The idea for tonight is 1512 level has quite a bit of weight over it as the level shifted between support and resistance throughout the regular session.

This in my mind makes the level ripe for a stop probe for some liquidity spiking.

 which is ultimately higher."

Goldman Sachs President and COO Gary Cohn spoke with Bloomberg Television's Stephanie Ruhle on "Market Makers" from Cleveland, OH today, one of the cities where Goldman provides education and funding for small business owners.

Cohn said....

"there is really only one way that interest rates can go over some period of time which is ultimately higher. I'm concerned that the general public does not quite understand the pricing of bonds and interest rates and the inverse correlation between the two."

Bloomberg TV's Betty Liu traveled to Willcox, AZ (population 4,000), for a one-on-one with Howard Buffett--Warren's son--as he prepares to step in for his father as the non-executive chairman of Berkshire Hathaway.  

Howard, who is on four boards including Berkshire and Coca-Cola, contemplates his future, saying that he's

"been preparing all my life. I've always had this great opportunity to observe my Dad and watch his behavior and watch his interactions with people."

Howard also said..

“protecting Berkshire’s culture means that I need to make sure that people feel that they’ve been treated fairly, that whatever my dad committed to them remains committed.” 

15 min ES

Overnight Musings

Happy friday....In keeping this quick the S&P 500 futures are unchanged at 1505.50 with the high being 1506.25. The channel to watch for break up over or under is 1503.75 and 1508, in between these two metrics the ES will surely chop around.

15 min ES. note the V

What goes up must come down? ...the dip buyers were back in force today, but a bit trigger shy as the bears gave up over 1494 as buyers slowly moved back in.

The ES rose from 1494.50 all the way back to 1506.75 before falling back to around 1506 were the futs currently sit as of this writing.

DO or die ES must hol 1490.25 if 1494.50 fails or its 85-70 ES quick.

The force behind today's dip, bond strength. at least that is what the correlation told me. Maybe some other force is beyond the trade i dont know and i dont really care because the charts said bonds were bid and equities were simultaneously offered as we noted earlier in the day. Once the bond bid subsided equities came back about an hour after the open.

30 min ES. note rising volume the past 2 weks

The NQ had a wild range trading up into a 2748.75 high off the open then falling to 2712 then bouncing in the last hour after Apple released a note acknowledging investor cries to return cash to shareholders.

Currently the NQ sits @ 2744.75 with a slight bid 2750 is a possible pinch level up out of a inverse H&S with 2712 being the head.

David Einhorn, president of Greenlight Capital, told Bloomberg TV's Erik Schatzker and Stephanie Ruhle on Bloomberg's "Market Makers" today that:

"several hundred dollars per share would be unlocked if Apple were to follow through on this suggestion…It doesn't put the company at risk. It's not financial leverage in the sense that debt's considered to be."

Einhorn also said:

"The call I had with them yesterday was very friendly, a very good tone of voice. I had a nice conversation with Tim [Cook] on this topic. He said he wants to review this proposal, wants me to meet with him and their advisers.. "

Updated TLT vs. SPY. notice how bonds stopped dead and then fell all day as ES_F rallied.. was the bond bidder only bidding to knock back equities so he or she could buy equities at a great spot? sure as hell looks like it when you look below at the chart.

SPY vs TLT

5 min ES

Equity indexes continue to gyrate over the 1500 level as the bond trade finds buyers in the face of a possible pullback the media has mentioned every other phrase for the last 3 days. ES currently @ 1507.25.

Will the pullback come? well if the ES breaks under 1505 this evening its back to 1500 which has air under into 1495 with 1490.25 being the finito line in sand before sell stops get hit flipping momentum lower on 30 min charts.

5 min ES_F note support a 1500 pink line

Overnight Musings

S&P 500 futures have little information to report for you this Wednesday morning beyond the fact 1510.25 traded and failed into 1505 which then failed into 1500.50. Currently the ES is down 4.50 points to 1501.50 with 1500 as the last line of defense before the spooz falls back to 1495 resistance turned support from Monday.

Nasdaq futures are lower by 11.50 points or -0.42% at 2737.75. Support is now 2735 which was resistance yesterday, under 2735 its back to 2712 support from monday morning. NQ under 2712 means 2700 test, under 2700 you dont want to catch the knife, over 2750=squeeze back to 2759.

Note what happend around 12:15 pm EST.. Bonds yields began to drop (TLT price rising) as equities (SPY) sold off into lows of 150.59.

Click chart for Larger

After the SPY bottomed out @ 1:30 pm EST its price began to rise in tandem with TLT's price. See the huge pocket created post 12:15 pm EST?  TLT closed green and so did the SPY by .07%.

ES 5 min

Amid reports of a 'earnings rally' the S&P 500 SPX closed +1.04% or 15.58pts @ 1511.29 after trading into a new 2013 high of 1514.96. Per the TFP morning letter:

"Our look for Tuesday when taking into account the positive overnight currency trends as well as the current bond weakness the ES could see 1505 in the first hour if 1500 can be converted to support with

monthly

5 min ES_F

 Overnight musings

In keeping with our k.i.s.s. theme here at TFP lets get right to the point, the S&P 500 futures are higher by 6.25 points or 0.42% to 1499.75 after trading as high as 1501.75.  Resistance in the ES will be at the 1504 level if 1502 can be converted to marginal support before the opening bell.

Russell 2000 futures are higher by 3.20 points or 0.35% to 902.20 after trading as high as 903.60, 901 is current support 905 resistance.  Nasdaq futures are are higher by 11 points or 0.40% to 2722.50 after trading as high as 2725.75, thus resistance is at 2726-30 with support at 2712.

5 min ES

S&P 500 futures are lower this monday by more than 7.50 points to 1499 after the 1500 level failed early Monday morning, i blame the Drudge report for jinxing the market friday with his 'bull run' headline.

But the real reason is weakness in European stocks has preceded this down move in US equity futures which were and are ripe for

Bruce Berkowitz, founder of Fairholme Capital Management, spoke with Bloomberg TV's Erik Schatzker about moving beyond mutual funds, his decision to close existing funds to new investors and why he likes financials. Berkowitz on mutual funds...

 "Mutual funds are great vehicles…They're transparent. They give investors daily liquidity. They're highly regulated. But there are also constraints that go along with that."

Berkowitz, who is raising money for a partnership that takes minimum investments of $1 million, said 

“at this point, I can’t talk about it, but stay tuned.” 

Monthly aud/jpy

St. Louis Federal Reserve Bank President James Bullard told Bloomberg TV's Michael McKee today ...

5 min ES.  PRE NFP

Happy Friday, the S&P futures are bid after seeing a slight dip into 1494.75 before we bounced back to where we are now 1499.50 with 1500.25 as the pinch higher target.