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Friday, September 18, 2015

Friday -- The Big Blink

S&P E-mini Futures:
Down sharply.

No hike. No Dovish Hike. No clarity. No confidence. The Fed blinked, and the market noticed.

Commodity currencies AUD & CAD are partying today.

JPY stronger, rarely a good sign in this environment.

USD down, but not as far as one would think. And I heard it again yesterday, "The dollar is over, toasted and roasted!" Doubtful.

It appeared bonds truly believed the Fed was going to raise, then suddenly doubted it. Then the carnage occurred -- prices skyrocketed on higher volume, especially on the short end. The long end, not so much. But such steepening, in general, is a lot healthier than inversion.

WTI crude correcting recent gains. Would have thought it would rip higher on the Fed news, so perhaps oversupply is causing issues. Seeing this in NG at the moment too.

Gold and silver are current beneficiaries of the Fed decision. Copper, not. Warning.

S&P Outlook:
Yesterday was a horror show. And I think the main reason why futures are down sharply is because people are starting to lose faith in the Fed, or this:

The market had been front-run. Then everyone hit the buy button -- at the same time -- which caused a 1600+ uptick, which is the highest I think I've ever seen.

When such extreme upticks occur, it's not bullish. It means everyone is too bullish. And late.

So it is where it goes from here that will likely tell the tale near-term.

There was major e-mini volume at yesterday's highs which, curiously, could spark a retest at some point. And now the next volume shelf is at the 2050 area. Until the B-wave is disproved by a sharp five-wave down thrust, higher is still possible.

Bot TVIX at 8.68. Dumped the SPY 200 calls at the first big uptick (1500+) before the Big One. Holiding the SPY 195 puts and have partially hedged them with SSO in the pre market.

So I think the Fed blinked. It doesn't matter to me where the market goes in the next few days. I truly feel that markets are more powerful than central banks and we're getting a taste of it as the reality creeps in.

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