Market Update

That intraday, oversold (parabolic drop) bounce (likely to fill the gap) is looking more and more probable as a small intraday divergence builds (positive), however this is not the "same old, same old", trade character should look VERY different this week (weakness) along with price declines.

I'll get in to the bigger picture later, but we found support at the trend line of the Broadening top as the market has been in a head fake move,  a break below this trendline should see a near vertical drop in the markets as fear is much stronger than greed, THIS IS THE MOVE I HAVE BEEN TALKING ABOUT SINCE EARLY AUGUST WHEN WE FIRST SUSPECTED A VERY STRONG BOUNCE FOLLOWED BY A STRONGER DECLINE. As I said, I'll touch on that in more detail later, but I'd be using these bounces (intraday or otherwise) to fill out short positions I'm interested in (I'm already loaded for bear so to speak).

The intraday charts...

 The intraday Index futures look ok, this is ES, it by far looks the best intraday with a positive divegrence (intraday) on the a.m. decline, thus the bounce to perhaps fill the gap mentioned earlier, but trade should continue to get much uglier as we move forward, nothing moves in a straight line and the market is always going to try to throw as many people as possible.

This is the 1 min SPY intraday chart, you can see the distribution last week and a small intraday positive this morning as a lateral support area forms which it will need just for a gap fill bounce.

 The QQQ is not positive yet, it will have to pullback a bit more, but I suspect it will have an intraday poisitive, it's just nothing like the sharp distribution to the left leading to this morning's decline.


And the 2 min IWM is starting to build it's intraday positive, note all of these occurred AFTER the volume short term capitulation, so this is a macro/micro concept that can be used on any timeframe, it's especially effective on longer timeframes with bullish reversal (or bearish reversal) candles, such as the 60 min chart I showed earlier this morning.

The TICK which was VERY flat early Friday before declining hit -1500 on this morning's sell off so it's pretty bad thus far.

Our custom TICK indicator vs SPY shows the negative intraday breadth, but also to the far right a break in that, this is our intraday bounce base that is building.

I'd be thinking about what assets you might be interested in shorting in to that bounce as that is a gift horse.