Intraday Update

As far as I'm concerned, there's really nothing to do here, but I did want to show you what is going on.

On some of the 1 min charts it looks like a possible bounce in to the close, this is why I felt to fade today's upside move was too speculative, but I don't think that changes the original story line of a continued pullback...Or for that matter, a continued move higher after a pullback and certainly not the bigger picture move lower after that.

Here's an example of what I mean intraday.

 IWM 1 min intraday has deteriorated since about the time I closed the XLF weekly calls this morning, however it put in a higher high, but not a positive divergence until/unless 3C locks it in with a pivot move higher from here which may happen and in that case a bounce in to the close would be highly probable.

However as to the early week/Monday pullback, there's still enough damage on longer charts that needs to be repaired and go positive before I'd consider buying any calls or short term longs.

For instance the 3 min IWM chart is still leading negative at new lows for the day. The 1 min chart would have to have enough strength to migrate to the 2 and 3 min charts and move these back to positive before I'd be ready to buy calls so from what I see, despite what "may" happen in to the close, it looks like the market has more downside/pullback to go which is in line with late Friday's expectations.

The continued bounce that really has just barely started is still on track for the rest of the week as well and there are some signals supporting that.

First the intraday NYSE TICK has deteriorated all day touching as low as -1250, a bounce intraday in this context wouldn't be surprising and wouldn't change much as far as very short term pull back probabilities.

The Custom TICK indicator is in the same spot as the 1 min 3C charts, it has deteriorated all day, but is right at a potential upside pivot , yet the larger trend still looks like the pullback story should continue.

 One of the reasons I think the upside sub-intermediate term bounce from the last week's base is still on track (other than the divergences) is that HYG is still leading the SPX higher (short term manipulation lever)- remember that small inflow of money in to HY credit last week? I suspected it was for a short term bounce off our week long base.

Even intraday HYG is leading the SPX so I don't expect any pullback will do any significant damage, I just see it as an opportunity to re-enter short term weekly calls or leveraged ETFs for a piggy back ride up. The main trade and main focus for longer term traders is shorting in to price strength. The last 3 bounce attempts we have seen and really any kind of price strength we have seen since July 1st has seen immediate and strong distribution so I suspect that's exactly what Wall St. is doing as well.