We can see below that the Cumulative Tick indicated indiscriminate buying. This was detected by algos which bought US equities just to ride the intraday trend, before getting out at the end of the day. This type of manipulation is encouraged by the fact that this week is options expiration.
On a longer term base, the Yen is still bought. A change in the TEV or in the price trend would set up us for a longer term push in US equities.
The 10 Years are also still somehow bullish. In theory, this is equities negative, but as long as equities are led by the NQ8, Treasuries might not be that important in the short term.
The NQ8 MF pattern still looks more negative than the NQ100 MF pattern. There could be an issue with the NQ8 stocks and I believe that this is the most important indicator to keep an eye on this week and next.
You might think that now is the time to short NQ8 stocks such as TSLA and NFLX, but I think that these are poor short ideas in the current context: these stocks are very liquid and hence will be bought by algos whenever they detect central bank interventions. There are not many very large stocks that can accept big inflow/outflows of money.
Even the big ETFs like the SPY continues attracting money.
VXX and VXZ are now being sold. Shorting these instruments in strength is probably the only way to make money in these volatility ETFs.
On a side story, there are still foolish value investors who believe that it makes sense to buy dividend offering pipeline stocks even and especially after their recent fall.
And you might also buy the Canadian dollar here
Conclusions:
As I wrote yesterday, markets are setting up for an end of the week bounce. Next week is a short week which is also usually bullish.
I would mainly be a weakness buyer here, but we need to keep an eye on the NQ8.
