The algos got going from the start, this morning. VIX pummeling turned what looked like a soft opening into new highs.
Lots of volatility, as is typical of Fed minutes days.
UPDATE: 1:30 PM
The minutes are due out in 30-min or so. The algos have done their job, preparing the “market” for a breakout. Note VIX is back to the daily lows, and the 10-yr futures were jammed lower overnight through the red support TL we discussed yesterday.
SPX has not only retaken the .886 that should have caused more than a 4-pt decline, but has completed a small Crab Pattern on the day. Note the seeming inability to get anything going on the downside — the algos at work.
The chart below shows the dollar-yen’s intervention to rescue ES multiple time, and then shoe horn it up over the .886 we discussed yesterday. The red arrow IDs the midnight bump that broke the downtrend prevailing at the time. The others represent various other efforts to keep it on an upward trajectory. The latest, around 11:30 ET, prevented USDJPY from completing a little H&S pattern and allowed SP/ES to post new highs.
Remember that almost every minutes released in the past year produced an initial (sometimes meaningful) dip to suck in those willing to place a bearish bet, followed by a sharp snap back rally that punished those who questioned the Fed’s wisdom. GLTA.
UPDATE: 2:50 PM
Concerned, but accommodative, slack, debate, rate-hike, blah, blah, blah… Sellers tried to get some downside going, but USDJPY (in purple) kicked in before even a .786 retrace on the day’s gains and helped SPX back above the important .886 at 1981 and to new intra-day highs. Will these gains stick, or will be get another 3am “adjustment” in the eminis? Stay tuned.