MARKET UPDATE

For our new members,  Welcome! These are 3C chart updates in the 1 min and 5 min timeframes. The longer the timeframe the more significant the divergence. 60 min or a daily divergence would show the most significant divergences. A positive divergence is usually a sign of accumulation by smart money and other players depending on the timeframe. A white arrow is a relative positive divergence, a white box shows a more powerful leading positive divergence, the same for red, except red denotes a negative divergence or distribution. At times you will see green arrows which is confirmation of the trend, meaning the trend at the time is stable. Be sure to note the timeframe at the upper left of the chart and the day/hour at the bottom of the chart running horizontal.

We usually update the SPY (ETF for the SP-500), the DIA (ETF for the Dow 30) and the QQQQ (ETF for the NASDAQ 100). The ETFs tend to give faster and better signals as they show different volume and are an earlier expression of trader sentiment.

It's important to note that a 1 min divergence shows intraday action, but if there's enough divergence, it will transfer to a longer more meaningful chart like the 5 min, if the accumulation/distribution is strong enough, then it will go to more significant timeframes, 10 min. 15 min, 30 min and 60 min. The longer timeframes show that the equity or index is under serious accumulation or distribution at which point we start watching the 1-5 min timeframes to try to ascertain when a reversal is coming.

 DIA 1 min showing  positive divergence that started around 1 p.m. yesterday, this suggests accumulation and a bounce move. You can see thus far it has prevented follow through selling.

 The DIA 5 min chart showing  negative divergence on Friday and the same accumulation/positive divergence starting yesterday afternoon

 QQQQ 1 min again showing the positive divergence starting at the same time as the above two ETFs -around 1 p.m. yesterday afternoon-note the leading divergence in the white box which is the strongest form of divergence.

 The 5 min chart shows a negative divergence starting Thursday and Friday of last week, Tuesday when the markets opened, they fell. Now the 5 min is showing some of the spill-over positive divergence from the 1 min chart above.

 The SPY 1 min is the last to start to show  positive divergence, it got a much later start, presumably because of the weighting in financials.

The 5 min though does show that there has been  positive divergence, although not as strong as the others, building. The green arrow shows confirmation of yesterday's downtrend, so we did not expect a bounce up yesterday on intraday trade.

If you have questions, feel free to email me.