Both the DIA and QQQ traded higher in Friday after hours trade, I suspect that's what the divergence was about, however it could also be the DIA still wanting to breakout before a reversal. Ether way, I started adding shorts on Thursday and Friday as I mentioned. The market is in a bad place right now.
Last week we saw strength building in the $USD and weakness n the Euro, this s bearish for the market. Whether the DIA n make it to a breakout or not, I feel we are close enough to start acting on a reversal to the downside as mentioned Thursday and Friday of last week. The disposition of the SPY 15 min chart is bad enough to start looking for the reversal which I think will be here early this week.
As of right now, the Euro is trading at $142.92, close to the open of FX trade this week (green arrow). The Q's, DA and SPY are all negative on the 15 min chart and most are negative up to the 60 min chart indicating distribution is well under way and may in fact be complete, which would lead to a reversal.
As usual a lot can happen overnight, but the intermediate trend makes me a lot more comfortable taking on short positions which have largely been ETFs such as SQQQ, FAS, EDZ, SPXU, UDOW, etc.
The debt celling talks will be a dominating factor in this week's trade.
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