You will note below that the NQ8 did not attract money during the afternoon bounce, contrary to the small caps. I believe that the NQ8 investors behavior was related to the coming TSLA/FB earning reports.
You will note below that among the three most popular?liquid ETFs, QQQ/IWM display a negative EV pattern, but the SPY EV pattern tells us that index investors are not giving up.
Note below that TWM has been attracting money. This is a sign that speculators (or value sensitive investors) are concerned about the small caps. Index investors do not use leveraged ETFs.
Also note below how the triple long ETFs are being shorted. These are also traders who are betting on a market reversal by taking advantage of the natural decay of leveraged ETFs. These patterns are not signs that the market will turn south here.
For now, we have to keep an eye on the Yen, which still looks negative, indicating that Japanese investors are still interested in US assets.
The 10 Years Treasuries are bought (probably by Japanese pension funds.)
Conclusions
Once the AAPL earnings are out, the Tax deal issue will be the main topic for the coming days. We are entering into a rumor triggered investment period in an expensive equities market.
Until the Tax deal goes through Congress, there is more sudden downside than upside risk.
