Market Update

This update will be a bit more complex I think. As has been mentioned many times, since QE3 was announced there's been bifurcation in the market signals and in individual stocks as well.

The intraday trade seems rather "blah" or at least the signals do. Take a look at ES 1 min intraday.

The green arrow is the 3 a.m. EDT European opening, 3C 1 min is negative pre-market and as we move in to the NY open, there's a small relative positive divergence now.

Not all of what I see though is based on 3C.

While I'm using the QQQ 60 min chart, most of the averages are in the same position, they are at an area in which there hasn't been a lower low, an area around the QE3 announcement and otherwise just an area in which you'd expect some support if for no other reason than just volatility's sake.

It's also an area in which there's a lot of in line signals and some are even building, take a look at the DIA 5 min.

DIA 5 min

The ES 5 minhas a small positive divergence as well. I'd expect some volatility bounce from here, actually yesterday I mentioned I was expecting something along those lines today.

It would also be nice to see what the market does with it as we have plenty of information on the downside.

Still when you move out to the longer term timeframes where there's less noise, they for the most part don't look good.

 Even if I ignore pre-F_O_M_C data, the post F_O_M_C data in most if not all cases looks worse. The DIA 60 min leading negative divergence.

 SPY 4 hr. leading negative divergence

 QQQ 4 hr leading negative divergence

IWM 60 min leading negative divergence-all of those post F_O_M_C.

Still that doesn't mean there can't be a bounce at a support area like this and based on everything we've seen with price patterns like this, that ends to be what happens, a lot of the time after a break below support first.

I'm going to look at some other assets, but think about how and where you could use any potential upside a far as setting up shorts you might like, phasing in to longs we have been looking at. A break straight down below this area would be quite uncommon, but who knows, it could happen.

There are more stocks now than I can remember seeing maybe ever, in which there are positive looking ones like BIDU, UNG, RIMM, etc and negative looking ones, GOOG, AAPL, IBM, etc.

A lot of intermediate term 3C signals aren't formed yet because of this recent chop at support, they need to catch up, but we have other tools as well.

I'll let you know what I find.