Market Update

You might have noticed the one thing you haven't seen a lot of today are market updates. As of last week we anticipated a bounce in the market to last to approx. mid-week, that doesn't mean up every day, but generally higher by about tomorrow.

Today there's very little doubt that the Dominant Price/Volume Relationship will be Close Down/Volume Up and other internals will also point to what would normally be a strong 1-day oversold condition which would indicate a bounce or green close tomorrow.

However today the signals have been very poor as to the market resolving early weakness as anticipated and turning that in to a toehold the market can bounce off of. I find myself wondering if we get an oversold condition and bounce tomorrow or if the market is simply just falling apart.

Look at today's NYSE TICK index and its breadth which is horrible...

 The NYSE TICK Index today has hit exrttreme levels of -1250 pretty consistently and as deep as -1650,  this could certainly lead to a 1-day oversold bounce tomorrow.

 The most telling asset however has been Short term VIX futures(VXX) as it trades opposite the market and 2 min negative divergences like this suggest it pulls back and the market bounces same as breadth indications above.

 The VXX 3 min chart shows the same.

As does the 5 min chart, all in line with expectations for a small bounce in the market (pullback in VXX) or rather not a small bounce, but a short lived one.

Why short lived?

 This is the strongest chart of all of the VXX charts above, a 15 min leading positive divergence in line with intraday activity over the last 2 weeks showing extreme accumulation of protection as mentioned numerous times yesterday with much better relative performance than the normal correlation.

This tells me that no matter what kind of market bounce we get, this ends badly for the market.

This SPY 5 min positive which is not all that developed is just about as good as it gets.

To me this is not worth a short term bounce trade, there's a lot of downside risk and as I said yesterday, I have a git feeling this turns fast just as it did today.

Perhaps today was the turn I was speaking of, although some of the evidence above (VXX short term charts) argues against that at this point.

 However when you consider a market related long, remember this chart of SPY 30 min with a HUGE leading negative divergence/distribution that has gotten worse and right where it would be most expected, ON THE BREAKOUT ABOVE THE TRIANGLES FROM OUR APRIL 2ND FORECAST.

 QQQ 5 min also with something "close" to a "W" base and a positive divergence, but that's very near term and you can't forget this...

QQQ 30 min (much stronger signal) leading negative.

THIS MARKET IS ON THE EDGE OF THE CLIFF LIKE  WILE E. COYOTE

 IWM 5 min also with a "W" like base area and slight positive

 The 10 min chart looks better and again as I said last week, near term underlying 3C signals look better in small cpas than the rest of the averages.

However, sear this in to your mind...IWM 15 min deep leading negative divergence

As for Index futures, intraday there's no well-formed base to bounce off...

 But ES does have a 1 min positive

As does NQ

And TF.

Normally I might take up a VXX put or maybe IWM calls, I just think the risk:reward relationship is starting to skew way too much toward a surprise gap down event on some unexpected news that can and will take out months of longs in one morning.

For me this is time to sit back and let core short positions work and not take unnecessary risk just to have some trade in the air.