Market Update

That's 3 for 3. What I'm referring to are the market calls for reversals based on oversold/overbought conditions in the market, 3C has been 1 component in showing us this and the Price/Volume relationships have been another.

The IWM perhaps illustrates this the best.

This may look like a consolidation. It's not, the volume is completely wrong for a consolidation. It's an extreme zone of volatility and we have called 3 oversold/overbought reversals within it. I talked about this last night HERE

Yesterday's negative divergence taken with the dominant price volume relationship=reversal

Here the Q's show a near breakdown from the volatility zone. Any traders that can't keep on top of these daily changes are getting chewed up through the meat grinder. This is why we have to look at the bigger picture and keep stops wide right now along with reducing leverage, especially on shorts and raise cash for opportunities. Once again, the volume, which should decline in a consolidation, is just random and huge along with the daily candle body size plus the wicks. This is an extremely volatile environment-very typical action for tops. Make sure you read the link that I provided under the IWM section from last night.

The Q's in a negative divergence yesterday. Most averages today are pretty close to confirmation.

The SPY looks like a consolidation triangle, once again, volume shows it is not. In my opinion, the trend has already changed and it is a mistake to believe we are in a consolidation. However, a break below any of the average's support trendlines should be acted on (add to shorts and inverse ETFs).

The SPY yesterday signaling a negative divergence. Even before the close it was obvious that volume would come in light and with the price gains our dominant relationship would be price up/volume down, which is the most bearish of all 4 relationships and last night it was very dominant.

Right now there's no real edge in 3C short term as we have a lot of confirmation, we'll watch for that to change, but watch price around support as it could change quickly.