The collision of global markets and social mood

Wednesday, April 2, 2014

Possible Blow Off Top In Futures

Futures spiked last night. This is the kind of blow off top action that makes me feel as though we're getting close to a larger correction.

The decline off the overnight high does not look impulsive, however, so it would not surprise me to see this area retested by the futures at some point, along with the cash S&P.

What it may have done is erase an important non-confirmation from yesterday. The S&P cash hit new all-time highs, yet the Dow, the Nasdaq, the Russell, the e-mini, and the SPY did not. Now at least the e-mini confirmed.

It is also a warning sign that the SPY was alone next to the other risk instruments that I track, as inspired by Tim Backshall (@credittrader).

By keeping this chart, I've learned never to trust a rally when the financials (IYG) can't keep up, and especially when JNK and HYG look weak, too.

I've been waiting for 1887 for months it seems. Who knows if it has gone stale or not. But there are higher levels as well. Having had ample time to rest, it is probably best to assume that at least the next Fib extension target at the 1903 area is in play.

To the downside, the structure of the rally would not look healthy below 1866.63.

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