Market Update

I want to get this out quick and it'll take too long to get all the charts here.

Basically the IWM, SPY and DIA are all in line on the 1 min chart, there's not a positive bias going into te close, just in line with price. On the 5 min charts, all 3 show positive divergences.

The QQQ is the exception, the 1 min and 5 min charts are exactly in line with price, they're not showing the 5 min positives the other 3 are showing.

From a market action standpoint, a lot of stops were hit today and that's where the 5 min positive divergences start, right where the stops were hit and at the lows of the day. The 1 thing that makes me still think there's a decent possibility of an upside move and the false breakout that I've been looking for is that the SPY DID NOT violate the lower trendline of the Triangle it's been trading in. There was a strong bout of selling when those stops were hit, but the SPY managed to stay within the triangle or held support. I use the SPY as an example because it has the clearest price pattern.

I personally would reduce my risk exposure a little going into the weekend. We want to increase our risk exposure when we have a strong, high probability trade. A false breakout with a negative divergence like we saw intraday at the close in the SPY on Tuesday was such a scenario. Or if we get a solid breakdown below that triangle and good confirmation. Those would be the strong probabilities. Inside this triangle we are just seeing a bunch of up and down volatility. I don't think it makes sense to have a lot of open risk. I'm not saying I would shut down all of my positions, certainly I wouldn't shut down the May 3rd trades in the inverse ETFs like FAZ, EDZ, etc. I would not have a full position size until they breakout, but I would continue to cary those trades so long as I wasn't over-leveraged on them.