Market Outlook

Today I posted the Macro outlook for the market. Friday there was this post showing accumulation through Friday afternoon. Then this post on Friday looking for a target of $129 on the SPY. Today, we all but hit that target. This is not coincidence, this is what I mean when I say that the game board is set up in advance and the market is not random.

Today's closing outlook....

The market update showing  a negative divergence at 1:43 was the high of the day.

 DIA 15 min. The 15 minute chart is where we see swings coming for the most part. You will notice that all the 15 min charts of each of the representative averages shows a negative divergence right before we saw the crash on Friday . Right now this 15 min chart is trading more or less in line, we want to see some solid indications on this chart to see whether the market will actually break down soon from this channel or whether there will be volatility shakeouts to the upside.

 The 5 min chart is divided between Friday and Monday at the white line. Note the negative divergence throughout the morning into 12 p.m., even the bump up in the afternoon was doing so under a negative 3C divergence.

 The 1 min chart gives more detail, you can see the positive divergence that caused the bump I mentioned. Here we see the bump trading mostly in line with price, but the 5 min shows us a little more negative character in the late day bump up.

 IWM 15 min-Again that Thursday, nasty negative divergence and Friday's positive that led to today's strength. As the 1/5 and 10 min charts take shape, they will melt into the 15 minute and give us the indication we are looking for.

 IWM 5 min chart showing Friday's positive divergence into the afternoon and today was in line with price until 2 p.m. when it went negative and the IWM lost some ground. All in all, the chart is pretty much in line with price here.

 IWM 1 min In the middle you see in greater detail the negative divergence into 2 p.m., a small bounce with slight accumulation at 2:30 (this is usually the market's middle men). There was a slight negative into the close.

 The QQQQ with the negative divergence into the false move out of the ascending wedge, a retest of that level saw another negative divergence, the white arrow is Friday afternoon's accumulation. This chart looks slightly positive today on the close.

 The Q's 5 min showing Thursday's negative divergence leading to Friday's meltdown, since then this chart has traded in line for the most part.

 The 1 min QQQQ showing a negative divergence into today's highs, then some accumulation and a slight move up. The accumulation zone is larger then the move I'd expect so again this chart closed slightly positive.

 SPY 15 min, the same as the other 15 minute charts.

 A good representation of Friday's positive divergence in the afternoon and the effect on the market today. The ending position of 3C is negative, but that nay be because it hasn't had enough time to catch up as the turn up at 3 p.m. was late in the day.

The 1 minute suggests that is just ended the day slightly negative as we can see nearly the same resistance level but 3C is considerably lower.

All in all, I think it's going to be a reset as we are not seeing the type of strong indication of direction that we saw on Friday. Why there was accumulation into an uncertain weekend, I don't know. It may be that they thought Mubarak would quickly be forced out of power and the military would take control and the riots would be over. That obviously didn't happen and now we have a huge march in Egypt planned for tomorrow. We know that the internal security forces have been dressing as protesters and causing trouble. There's also a lot of animosity between the army and the police/internal security. There's a lot of room for error tomorrow, even as tensions seem to cool today and there are a lot of shady characters looking for their spot in a new government. Tomorrow may be defining. Make sure you take a look at the post linked at the start of this article about the macro analysis. That will be key and if it goes south, it will go south quickly.

A quick side note, USO did post a 5/10 min negative divergence toward the end of the day. More on that in the a.m.