It's one thing to see a chart with a strong divergence, the kind that jumps off the chart, that you don't have to look for. Sometimes I thumb through hundreds of charts a night using 3C and the space bar to forward to the next symbol, I've literally have grown so use to looking for divergences that are screaming "There's a huge edge here, Do NOT ignore it!", that I can generally flip through about two charts a second, only stopping and lingering longer for that chart that jumped off the screen.
The point is, that kind of divergence on a single timeframe is one thing and don't discount its value, but that asset having what I call a "Full House", meaning a number of timeframes all showing similar divergences, I know I have a real pearl.
However even beyond that, when I have an asset that has multiple asset confirmation, take the QQQ's with confirmation in QID and QLD and perhaps XLK as well, that's a whole new level of confirmation, much stronger.
But when I have multiple averages in multiple timeframes telling me the same message of the market, we've reached new heights of market edges.
You might think that's impressive and it is, but what I'm seeing now goes even further. When you have assets that are closely correlated like QQQ/QID/QLD or QQQ/SPY/IWM/DIA, that's very strong confirmation, but when you add assets that are totally different asset types altogether confirming the same ideas, such as VIX Futures, Treasury Bond Futures, Credit, Currencies in single currency futures and pairs, all showing a push toward the same place via multiple correlations, you have the grand slam of analysis (add leading indicators in there as well and breadth charts which add a whole new dimension to your analysis).
These kinds of correlations, confirmations and probabilities can't be made up or cherry picked, they are so deeply pervasive that the entire market is showing just how interconnected it is and just how big the billionaires boys club really is. Technical analysis grew from the Internet making cheap online brokers possible, before that it was known and often discredited as "Voodoo Analysis" with comments like, "How can squiggly lines tell you anything about the value of a stock and where price is going?". However as it turns out, Technical Analysis was the easy way out, the lazy person's choice analysis because it can be boiled down to something as simple as a price/moving average cross over or a moving average cross over. TA gained in popularity, from Voodoo to mainstream because of people's laziness. This type of Technical Analysis, I think you'll agree, is anything but lazy.
This may be a bit confusing with so many assets and so many timeframes. Let me just put it like this, negative Index futures means negative market going forward. Negative USD means $USD FX pairs like USD/JPY and EUR/USD will be effected. Stronger positive Euro and Yen signals mean the USD/JPY which has been used to diminishing effect, to ramp the market should see a massive turn to the downside which is what I predicted almost 2 years ago, still linked on the member's page under "Currency Crisis" which looks for a rising Yen as the market falls.
The strengthening Euro with a weakening dollar means the heavily shorted EUR/USD has a chance to pop strongly to the upside, also signaling on a stronger Euro that ECB QE is less likely, also a market negative.
With a weaker $USD, $USD dollar denominated assets should rise like gold, silver, oil and numerous commodities, but many will be tempered by decreasing global demand, so the commodities which we look at have to have more than a weak $USD, they need strong accumulation signals which is why ?I bring up silver recently.
Interest rates and Bond Futures not only signal a flight to safety trade, but bond futures trade opposite bond yields and the market tends to follow yields so higher bond prices means lower yields and lower stock prices. All of these things mentioned above are shaping up in different strengths, across the board, the message is: market weakness, EUR/USD strength (hinting at diminishing chances of ECB QE), USD/JPY weakness (and a lower carry trade as well as Nikkei 225), Treasury strength- especially in the long end, lower rates especially in the long end, and higher silver prices as well as other commodities, perhaps natural gas.
The charts...
EQUITY FUTURES
The NASDAQ 100 futures are deeply leading negative divergent. Again the same message is as above, while a good swing trade timing support cart, this looks more like a timing indication for a much larger, sharper and very volatile downside move.
ES / SPX E-Mini Futures 4 hour, a strong timeframe and well beyond a swing move, hinting at a sub intermediate move that makes a new low in the market, below the October lows shows from left to right #1 the July negative divegrence leading to an SPX decline of 4% and R2K decline of 8%, this also brought breadth down to deeply oversold levels which I wrote about on the night of July 31st in which the SPX was down 2%, suggesting this was a signal that a base would form for a sharp upside move.
At #2 a week long base formed and broke out to stage 2 mark up, with 10-days of breadth repair before breadth started deteriorating as the market moved to a stage 3 top at #3 and a head fake move (Igloo with Chimney- with the chimney being the head fake) at #4 with leading negative divergences and leading indicators taking us to the anticipated new low, below the August lows in which we saw almost 2 weeks of base build since October 2nd, a level in which we have long surpassed so even if you went long on the first hint of a positive divegrence, you'd be in the green right now.
At #5 the base for the October rally which we warned well ahead of time would be a face ripping , intense rally that was meant to change sentiment as I was saying at the time, "too many people are calling this a top and that makes me uncomfortable, a top will come when most people are bullish" which was the entire point of the rally and my challenge to book mark that post as I said the rally would be so strong, even with forewarning of what to expect, even our members would be moved to emotional paralysis and a difficult time using the gift of market strength to short into, something we would have given anything for on October 14th.
#6 is the head fake move to new highs needed to sell the rally as legitimate, the only way to get retail buying in what was otherwise a very bearish market. Also note the volume on the way down in October and the way up, VILUME SHOULD ALWAYS ADVANCE IN A HEALTHY RALLY. WOULD YOU BUY SOMETHING AT HIGHER PRICES WITH LOWER DEMAND AS AN INVESTMENT?
#7 is simply the deep leading negative divegrence through this leg, worse than the two previous pivot tops, which I believe form a Broadening top.
VIX Futures
Currencies
SILVER
This is a 60 min positive divegrence as silver hits stops under support.
Currencies- this is with an emphasis on pair, cary trade pairs.
Of course a strong Yen and weaker USD means a weaker USD/JPY and I don't have to tell you what that means for Index futures which are already giving the same signal on their own.
Treasury Futures
We have at least 10 different assets in multiple timeframes in very different asset classes all pointing to the same thing.
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