Ever since this morning's first post, it's been fairly clear to me that today was an extension of yesterday's head fake to the upside, the direction and duration of a head fake are hard to quantify, we just know that in most cases they are coming before a trend reversal, I wrote about that last night. In any case, it gave many of you great positioning today as I am gathering from the emails.
Here's the DIA 1 min which is the only major that is showing a positive relative divergence, maybe a consolidation, maybe another intraday correction or maybe nothing, it doesn't really matter in the larger scheme of things.
The 5 min chart shows the distribution of the last correction and again a relative divergence now.
The 10 min chart has lost a lot of ground today and set a new low in the negative leading divergence, I would guess there was very strong distribution in to this morning's strength.
The 30 min chart has even moved in to a negative leading divergence, which I'm not thrilled about as far as a rebound form this move, but we'll have to see how it acts as prices move lower. At least you should have some shorts/inverse ETFs to make this move worthwhile, it has been telegraphed for several days to prepare.
Luckily the 1 hour chart is holding strong in a positive leading divergence as well as the daily.
The IWM 1 min shows distribution at the last correction and is in line with price at the green arrow.
The 5 min gave up significant ground in a leading negative divergence into the strength earlier, as suspected.
The 10 min chart is setting a near new low in a negative leading divergence, just compare the real 3C low and the current one and price at the two relative levels, a lot of distribution today.
The 15 min chart gave up a little more ground as well. This is the point of the head fake, any buyers are trapped as Wall Street takes the other side of the trade on a short sale.
I don't like the deterioration in the 30 min IWM chart, but the 1 day is still strong enough, but we'll want to watch how this reacts in to lower prices. As I said last night, we have a blueprint, but there will be some surprises along the way as the market always swings way too far in each direction. Also remember I've been saying the point of this decline is to get shorts back in the market to squeeze them later, so the market will do what it has to to gain their trust to re-enter the market.
The QQQ 1 min chart shows the last correction's divergence and is in line now.
The 5 min chart has taken out yesterday's head fake level and some significant support. 3C is digging toward a new leading negative low.
The 30 min chart is also showing weakness here. Luckily it's daily chart is one of the strongest of the bunch.
SPY 1 min gave the early signal that this strength in the early part of the day would be faded, that was your cue to set up positions and short n to strength, that is why I uncharacteristically posted it so early.
The 15 min chart is reaching for new leading negative lows.
The 30 min chart here too is showing significant deterioration, so this could be quite a wild shakeout.
The 60 minute chart retains its strength.
So look for this to be a pretty ugly move, when you start doubting whether the market can come back from it, then it has probably done its job.
No comments:
Post a Comment