Broad Market Update

*See the very bottom for the bottom line, but the entire post should be read.

I've been going through a lot of charts trying to put a composite picture together.

First what I see as an upside risk based on concepts largely, not so much objective evidence other than what might be considered passive evidence.

The upside risk I see as a head fake move is just the head fake concept in which the more noticeable a range, the more watched an asset, the more likely that there's a head fake move before a reversal, if you pay attention to a lot of the charts in any timeframe, you'll see head fake moves, whether stop runs or false breakout just preceding a reversal, as per the concept, I estimate we see these about 80% of the time JUST before a reversal (in this case down).

The SPY (market) has done EXACTLY as we forecasted for this move...

 The exact forecast was for a move ABOVE this descending triangle and/or a Crazy Ivan shakeout which technically occurred on the lows of this most recent bounce as they were the lowest intraday lows of the year, meaning they ran any stops at support for the triangle throufggh all of 2015, you'll see it moore clearly on the next chart.

Conceptually, this is the best case for a move above today, the concept of a head fake move which depends on a well formed resistance or support area, in this case resistance and the head fake move would be a false breakout.

The first yellow box to the left is the head fake/stop run below all support for the area/2015, this gives added short squeeze momentum and we just saw one of the biggest Most Shorted Index squeezes this week, so the concept worked not only as a head fake move, but the reason why, the MSI short squeeze the strongest since Sept 2013 which is what got us up to the top of the range.

I see this conceptually as the biggest upside risk, although I see it as ultra high probability of a head fake move or failed breakout, which would make it a great set-up for puts or shorts.

On the other side of things, you saw yesterday's weakness out of nowhere and quite strong, even with a strong Most Shorted Index short squeeze, the TICK barely moved all day.

Then additional weakness today, but much broader and much stronger, Market Update-Something Strange Edition

The market vs the last two bounce attempts through all of 2015 thus far, is just as weak if not weaker than when and where they failed.

 intraday SPY 1 min calling a pullback intraday and in line since, it has moved lower obviously since this capture.

 I meant this to be last, but the 2 hour SPY from the strongest point which was the October lows/base and the clear leading negative divegrence hitting consecutive new leading negative lows, this represents the resolution of this cycle's highest probabilities, very negative.

 I meant to show the shorter charts and work to the longest, but this will have to do for now- the 3 min SPY and strong weakness intraday as you saw in numerous assets today.

Represented on the TICK, unlike yesterday with a monster short squeeze in the most shorted names that barely moved the NYSE TICK Index out of a tight +/- 500 range, today's selling effected the market and showed up...

Early as we saw gains in the market the TICK was flat, as we saw the decline we hit extremes of more than -1500 which is big and we hit a lot of deep extremes.

 The 5 min chart like just about all of the averages has not confirmed any upside move, in fact it has been in distribution mode, as with the two previous bounces, the idea was they need price strength to sell in to, that appears to be what has continued to happen, although likely to a sharper degree this time which would suggest the market preparing to make a lower low.

 10 min chart with as little drawing on it as I can, look at the 3C trend through the range,

I've highlighted areas of divergence.

What I haven't seen that I'd expect to see is a sharp negative in HYG, it's not there and usually is before a reversal. I don't see any strong moves in the professional sentiment leading indicators, they remain in line with the SPX, I do however see relative strength in both VXX and VIX (spot), this would have made sense as a hedge yesterday before the NFP this morning, but today it does not make sense unless someone is expecting a move lower soon.

 VXX unusual relative strength vs (inverted) SPX today.

Spot VIX showing the same.

 As for VXX charts,

 VXX 2 min leading positive along the lines (strength) of the market's weakness today as the two move opposite each other.

 VXX 5 min positive

VXX 15 min positive, it looks like it is getting ready for a move higher and the market a move lower.

Yields are supportive (today) of higher prices as you see by the 30 year and the 5 year is the same.

However I don't know for how much longer, the drop in treasuries that made this possible today doesn't look like it will hold...

TLT 3C charts.

 TLT 2 min positive the opposite of the market average 2 min charts.

 TLT 5 min leading positive

And TLT 15 min large relative positive.

HY credit fell today at the intraday highs, leading prices of SPX (green) lower

 HY Credit intraday

Here's the HY credit trend through the range.

Still HYG isn't cooperating yet or giving its usual signal.

The upside risk would be (as per probabilities) short term/short lived and offer some opportunities, but it is passive in that the best probabilities for an upside head fake move are the concept itself, and a few leading indicators that haven't gone negative yet,  it's not in positive divergences that suggest that breakout to the upside. This is why I'd consider it passive.

On the other side we have some very fast deterioration in the same area it has already occurred twice, we have a reach for protection in the 3C charts of VIX and Treasuries.

It's a little early to guess what the closing 3C charts are going to be, thus Monday's price action's highest probability, but so far it looks like the market picks up about where it closed, followed by weakness later in the day. As of now, the example would be...

 IWM 1 min in line suggests price Monday morning picks up at today's close.

IWM 3 min suggests later in the morning or afternoon Monday, strong weakness builds in.

I have to include the head fake concept as I preach it all of the time, it would be disingenuous for me not to include that possibility as I think many of you probably had already figured out on your own being we use the concept so often.

My gut is weakness and not just a return to the lower band of the range...