Early Indications

It looks like as I said in the A.M. Update, that both pieces of analysis last night that seemed contradictory with the day time charts still needing to see the 5 min charts go negative before we continue to a lower low, would need to happen, but at the same time last night's very negative Index Futures were also correct, something last night I viewed as one or the other, but it looks like both could be correct. Remember last night's very ugly index future charts were short term 1 min charts, thus the intraday ugly action this morning and overnight. However what I failed to take in to account was the 1 min charts for the averages which were negative, I was thinking about them needing to migrate through the 2, 3 and 5 min timeframes before this bounce would end and we'd see a lower low, WHAT I FAILED TOI CONSIDER WAS THE 1 MIN NEGATIVE AT THE CLOSE YESTERDAY AS 3C CHARTS ALMOST ALWAYS PICK UP WHERE THEY LEFT OFF AT THE CLOSE ON THE NEXT OPEN, EVEN OVER A 3-DAY WEEKEND.

And the 1 min charts ended the day yesterday negative, thus the negative action this morning would be right in line, instead I was too focussed on the migration process from the negative 1 min charts needing to migrate through the 2, 3, and 45 min timeframes and the very sharp, very ugly index futures and seeing them as competing signals , in fact they were exactly the same, the short term was very negative, but the migration does need to continue and to that end I believe we are near intraday lows for the morning session and likely to see an intraday bounce to allow those 5 min charts to go negative and create our next lower low.

The 1 and 5 min 3C charts for the major averages

 As you can see, as I said last night the 1 min and many 2 min and some 3 min charts are already negative and need to move to the 5 min chart. Thus the negative 1 min chart was reflecting a lower open, but right now it looks like it's starting to go positive on an intraday basis which will let the process of migration through the 5 min charts to continue as they'll distribute in to higher prices, not lower, the same as we want to short in to higher prices or buy in to lower prices, not the other way around and in their size, it's essential unless they want to send the market against their position.

SPY 1 min is starting to see an intraday positive after yesterday's afternoon closing leading negative.

The SPY 5 min chart from earlier in the week negative and yesterday's bounce off intraday lows -this is the chart that still needs the migration process of the 3C divergences to continue until this chart is leading negative again, then we should be looking at a lower low being made.

The same with the 1 min IWM which is now going positive 1 min intraday

However this 5 min IWM chart which was negative in to this week saw a positive divegrence at yesterday's lows and this chart is still in line and thus needs to see negative 3C divegrence migration across the 2, AND 3 MINUTE TIMEFRAMES ACCELERATE AND TURN THE 5 MIN CHARTS NEGATIVE, THEN WE'LL BE READY FOR A LOWER LOW AND IT WILL GIVE US AN OPPORTUNITY TO SELL SHORT IN TO SOME PRICE STRENGTH.

 DIA 1 MIN NEGATIVE AT YESTERDAY'S CLOSE, THUS THIS MORNING'S GAP DOWN, IN LINE WITH LAST NIGHT'S VERY NEGATIVE 1 MIN INDEX FUTURES POSTED, BUT NOW AT A POSITIVE INTRADAY DIVEGRENCE WHICH IS NEEDED AS I SAID ABOVE, DISTRIBUTION OCCURS IN TO PRICE STRENGTH, NOT THE OTHER WAY AROUND AS MOST RETAIL TECHNICAL TRADERS BELIEVE.

 DIA 5 min with a negative in to this week and a positive at yesterday's low on a 5 min, which is the last timeframe we need to turn negative to enter shorts and look for the next lower low.

 And QQQ 1 min positive in to this morning's lows, although on a relative basis, the underlying trade in QQQ right now is the worst looking with IWM a close second.

And QQQ 5 min, clear negative in to this week and a positive at yesterday's lows, the chart is in line right now, it needs to go leading negative.