Back to regular programming soon!

Hi folks,

I've been a bit busy lately since I got back from holidays and I haven't yet gotten into the blogging mood but I will rectify this over the weekend. Current thoughts are:

• Very strong inverse correlation between crude futures and the e-minis. The fear to me at this stage seems to be that if we get a large spike in the price of crude, then this may force central bankers to start raising rates earlier than expected. Note that the comments from one of the ECB bankers a couple of days ago really spooked the Euro and it had quite a bit of a meltdown (normally you would have expected the Euro to rise but I guess traders are thinking more about the longer term effects that higher interest rates would have on the struggling PIIGS to repay their debts and what that would mean to the Euro if any one of them defaulted). Any rise in interest rates would signal an end to the flood of liquidity we've had and that would not be good for equities or the global economy as a whole as it is still recovering.
• Based on quant studies such as patterns, the odds still point to a higher market in the intermediate term 3-6 months out. ie any nice pull back or correction sell off is likely to be a good opportunity to get long.
• The short term technical picture for the S&P shows that we are forming a triangle pattern as longs and shorts keep building positions by fading the lows and highs. Watch for an eventual break of this range soon as all we need is a catalyst to make a big push in one direction and one side is forced to cover. I might make a separate post about this.
• We've had some pretty good distribution days of late as seen by cumulative tick action (there's been 3 days over the last 2 weeks where we had more than -60,000 in cumulative ticks).
• Each day that we begin with a weak opening and a bit of a sell off, I've observed program buying stepping in and pushing the market back higher again at key levels. How do I know?? Because I keep hearing alerts on my trading platform when I get spikes in NYSE tick action of +600 to +1000. How long does this last I do not know
• We are seeing large gap downs in the overnight futures right now below the low of the cash session. This presents a high probability that the gap will not fill and is suggestive of a continuation move down in the cash session. It will be interesting to see whether the low of a few days ago, 1302 in the ES, holds.