SQQQ Trade Position Update / Market Update

I have been going through my watchlists again as I did on Friday and there are just numerous stocks I have on my short list ("short list" in both senses of the word), I have a good 25 that I could put out right now as trade ideas, the theme is still essentially the same as Friday, it has just moved along as I was expecting names like NFLX (that I did post) are looking great from the strategic/probability level and timing, it's really just that reversal process or lateral time movement.

SQQQ is a position I like for general broad market coverage without having to worry too much about the best specific sectors. From a risk point of view as far as draw down, I really wouldn't have much of a problem entering or adding to it here, my main risk concern is open market risk, meaning if I don't feel it's the best possible timing or that there's more lateral movement, you have open market risk to unknown, unpredictable fundamental events.

The way all of these assets are moving, it almost looks like the market is setting up for disappointment in Thursday's ECB policy announcement (they do have pretty lofty expectations and in the past Draghi has been more talk than action).

Intraday charts like 1 min in the averages and these watchlist stocks are moving in a sloppy manner, but if you look close, it's what I call "steering divergences". If you think about how institutional orders are filled, they are graded (the market makers and specialists who fill the orders for large institutions are graded) by the fill relative to VWAP, the Volume Weighted Average Price. For a short fill, they want to sell short either at or above VWAP, for a long fill they want to buy/fill at or below VWAP. This is one of the reasons we see strong divergences in flat price ranges because the stability of price (which looks boring on a price chart and as if nothing is happening) has a lot more to do with making slight adjustments (as market makers and specialists can move price intraday by working the bid/ask and taking in or letting out a little supply, this essentially lets them get back to VWAP or a more ideal fill and continue filling the order.

I'm seeing a lot of charts that look like this...

 The little bit of accumulation this morning just prevented SPY/market from dropping and lifted it to a more favorable area to sell short. This is what I'd call a "Steering divergence" and it's on the right timeframe for it.

However the larger underlying trend of what's happening can be seen on the longer charts that show the heavier underlying flow.

 Take the continued deterioration of this 2 min chart, notice the stability of prices where 3C is making lower leading negative divergences.

Or this 3 min chart which is doing the same. This is what I'm seeing on the watch lists.

As far as the high probabilities and why I'd say this is distribution in to the reversal process, there's a solid trend of distribution from all of last week which I pointed out earlier is at an area (in the SPX) which is above the range, it looks like a breakout, retail will buy and provide the demand that Wall St. needs to sell/short in to as their orders are significant in size, they need that demand to keep prices stable otherwise they'd crash the market/asset with the amount of supply they are putting out (selling/shorting = supply which= lower prices if not managed).

This shows all of last week under distribution in to higher prices, but the short squeeze that made this possible has died off as have levers like HYG, it's now really about managing price.

So as for SQQQ, 3x short the NASDAQ 1000,

 SQQQ's 60 mn chart has been nearly perfectly in line, our edge is in divergences, this 60 min leading positive is our edge and a strong one at that.

The 30 min chart is the same

The 10 min chart shows the reversal process as price action has transitioned from down to lateral, the reversal process.

These leveraged ETFs are great for signals, I think because the leverage requires that they be entered more timely.

The 5 min chart really leading at the reversal process.

The same with the 3 min chart, but...

Intraday trends are more steering, not letting this rise or get away from the accumulation area/reversal process.

This is what I'm seeing as the general trend in my watchlists and not just market averages or ETFs, but assets like NFLX, FB, AAPL, etc.

I'm VERY tempted to fill out all short positions, I just want to be careful of timing and not have dead money that is subject to open market risk. I'm thinking that the intraday 1-2 min charts will start to show a different character as we get to the best timing and with a 3-4 day or more, reversal process, the probabilities of a head fake move just before a reversal grow exponentially.

For super leveraged positions like options, I'd want to open those in to a head fake move as that would help remove the edge Wall St. has over you when it comes to the premium that options come with, in other words you are getting a better price and just as important (especially if you play your options expiration tight), the better entry timing reduces time decay.

I WOULD NOT FEEL COMFORTABLE NOT HAVING ANY EXPOSURE ON THE SHORT SIDE AND I HAVE MAINTAINED THAT EXPOSURE WITH PARTIAL POSITIONS THAT I'M FILLING OUT HERE AND THERE AS GREAT LOOKING CHARTS POP UP.