3C on the close

The market looks set with enough underlying support to head toward the SPY $132.50 area which seems like the ideal spot to pin the most calls and puts.

 DIA positive divergences on a 10-min chart, note that the second move below the range showed an even stronger divergence then the first.

Here, the IWM which has been one of the weaker looking indices puts in a 5 min positive divergence during the afternoon chop.

 The QQQ 5 mn 3C chart also builds the strongest divergences this afternoon.

Here's the 1 min SPY chart with 2 head fake breaks below the sideways chop, both divergences are positive and strong for the timeframe. This all appears to fit well with yesterday's Call/Put option analysis in which the maximum pain looks to be in the area of $132-$132.50 on the SPY.

As for the bigger picture...

 Defining the trend, we see the short squeeze rally at the green arrow, the candle in the red box broke the back of the uptrend and every daily candle with an orange arrow defines the downtrend making lower lows/lower highs, only yesterday's candle was a noise candle within the trend. My guestimate target for the op-ex close based on the options chain is around $132.50. Today becomes the signal candle in defining the downtrend and so long as there s not a candle that has a close with a low higher then $132.78, the downtrend likely stays in effect. Even with a close at $132.50 tomorrow, tomorrow's candle would likely be considered noise in the downtrend.

 Here is the 3C cycle from accumulation in June to stage 2 mark up or the short squeeze rally confirmed by 3C at the green arrow as it makes higher highs with price, to the distribution phase at the red arrow and now stage 4, decline makes a nearly completed cycle, I say nearly because the decline section is likely not even close to finished. Nearly all trends proceed in this fashion, whether on a swing basis, a long term investing basis or an intraday rally. Technical analysis tends to be fractal n that way.

Here's the SPY 30 min chart, if you recall it was the strength of the 30 and 60 min charts in June that gave away the short covering rally, so they are significant timeframes and currently confirming the downtrend as far as the larger picture goes. There's strategic action and tactical action, in my view, the strategic outlook is for a trend down, the tactical view s to use any remaining strength n the market to enter short positions that you like, that are high probability and low risk.