So far we have the price move, but remember the entire premise of this move that was forecasted yesterday was based on a concept that we have found to be true more often than not, it wasn't even based on market signals as this was a fundamental news story (European PMI overnight)....
That means for a head fake move to be effective and worth running, it has to achieve a goal which is usually sentiment related. A higher high is what forms the chimney above the rounding top (Igloo), so when price moves enough to be convincing to traders to abandon short positions and go long, it has done its job, that's what I'm looking for.
As for the charts...
Algos have been keying off the USd/JPY vs Es correlation since 3:30 a.m. when the European Composite PMI came out (Flash reading), there's an obvious negative divergence in USD/JPY so I feel pretty confident it's going to come down and Index futures with it.
As for ES/SPX Futures intraday, they're already going negative, but I'd like to see them either move sideways a bit longer so this is more of a process than an event (reversal to the downside) and I think that's probable looking at TF and NQ.
TF 1 min is relative negative, not leading yet so I think there's more time in the area, which is fine and should be expected proportionally.
And NQ is still in line so I do think we get what I'd like to see, either flat/sideways to widen today out or a bit higher which is better for put entries.
The VIX Futures have been leading positive on the stronger 15 min chart, I'd hope to see this make a new higher high in 3C before they move up/Index futures down and we'll be able to tell by the intraday chart...
1 min VIX futures, when they start leading positive, then I think we'll be at a pretty decent area.
The TICK trend has broken a bit, I'm hoping it can hold on a bit longer.
Again, these moves have a purpose and function, there's no point in running them if they aren't effective, so when it feels a bit scary to be thinking about entering a put/short, that's when they're doing their job.
More to come...
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