Now We Wait

11:00am EDT: We touched the 928 mark this morning as I expected last night:

Right now there’s really not much to do for us. We might push a teeny bit higher here to complete (iv) or {iv} – or we drop right away to complete (v) or {v} – still not sure what the degree is. Don’t overtrade – the tape looks pretty indecisive – and let’s always remember that it’s OPX week and the market makers are not in the habit of making that one comfortable for us rats.

11:05am EDT: For your channel surfers:

If we melt higher in this thin tape keep an eye on that resistance point around 932 on the SPX (or 93.5 on the SPY). We breach that one and the bulltarts might try push this thing up a bit more.

This has the looks of a pretty boring day – not that there’s anything wrong with that. There will be a lot more excitement going forward – that much I can promise you.

11:16am EDT: Since last night a lot of folks are freaking out about a ‘massive drop in the Dollar’:

Yeah, as an FX trader this is a big move if you were exposed to the long side. But from the perspective of a trader who mostly watches this in terms of a ‘soft correlation’ this is nothing but a yawn. Wake me up once we breach below 80. BTW, by ‘soft correlation’ I mean that I don’t trade commodities up right away when I see a small drop in the Dollar – it’s more of a ‘bias’ to me. Each market has its own dynamics – and correlations have often been falling apart lately. Be careful trading correlations – sometimes they work for a while – until they don’t.

11:25am EDT: There’s a strong seller at 924 in the ES – it’s been like a wall since about 8:30am EDT. We just breached below VWAP at 922 – this could be it. If they manage to push it above VWAP again prepare yourself for the Swedish Chef – chop chop chop.

11:42am EDT: Guess who’s on TV again:

BTW, before you guys start chastising me – I’m not a Repuke.

11:50am EDT: Now, this is interesting. Since December 30, 2008 there hasn’t been a single TOMO auction, judging by the NY Fed’s TOMO trail. A few weeks ago a little birdy told me that they had moved the whole liquidity game behind closed doors via TIOs and the TAF. And once you include those two facilities – voila – there it is:

Seems to me that the Feds are starting to drain the swamp. BTW, that would be very bad for equities – the Feds can’t have their cake and eat it too – either they have rising interest rates or they force cash to come out of equities and ‘seek shelter’ in treasuries. BTW, hat tip to Jeff over at The Housing Time Bomb – seems he, Tyler, and I are among the few folks following this stuff. But trust me rats – this is where the magic happens.