Charts I’m Watching: Jul 24, 2014

Wednesday, the dip came early — with ES giving up 5 points early in the session before rebounding.  A Bat Pattern completed at 3am, sparking a 9-pt ramp job and continuing the “market’s” practice of making important reversals in the after-hours.  The net: hold overnight at your own risk, because the close is likely to be a head-fake.

2014-07-24-ES 15 0615

Interestingly, the futures have declined since the better than expected initial claims.  And, this on the biggest POMO day of the month. Go figure.


Guess we know why the weakness on the opening, despite huge spikes in USDJPY and yields: the craptastic housing report was obviously well-known by some prior to the opening.  Like last June, no polar vortex, high interest rates or boogie man to blame it on…  From Zerohedge:

Screen Shot 2014-07-24 at 7.16.38 AM

In fact, it probably explains yesterday’s weak close, below the TL for SPX.  It’ll be interesting to see whether such dismal economic news can provoke even a small sell-off.

Interesting historical note: the even worse July 2013 report was released on Aug 16.  SPX, in the middle of an 83-point, 18-day slump, fell 9 points on the day.  It was on the heels of a month-long correction that began on May 22 and knocked 126 points  (7.5%) off SPX.  At the time, the Fed was pumping $85 billion per month into the banks’ coffers (though Bernanke had already used the “T word” in June.)


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