The Plan for Today

Here's the way I see it best captured by the IWM/Russell 2000...

I'm using the R2k/IWM as an example because it is the average that should, in a risk on environment, be leading, instead it is the biggest laggard and it has the features that I think define the overall market scheme of things right now.

 Here's a bullish ascending triangle, assumed by technicians to be a bullish continuation pattern, assumed by me to be a head fake set up to trap longs. Yesterday we saw the breakout, today there's no follow through at all, not bullish!

 On an intraday chart, you can see what I believe to be the head fake breakout yesterday because 3C didn't confirm in any of the averages or the main 3 industry groups. The IWM found some support right at the lower triangle trendline and there's a gap at the white box. The market has been very predictable lately in filling gaps and I'm thinking this one will be filled or at least an attempt.

 This is the bigger picture, the IWM 15 min hart is leading negative, I can't see this in a bullish light and in fact looks to set up at least a swing trade, so this is the strategic view, now for the tactical entry.

 These are the short timeframe 3C charts with no confirmation from yesterday, 5 min.

 2 min

 1 min

However zoom in on the 1 min and you an see the relative positive divergence that found support at the triangle's lower trend line and there's a leading positive divergence that has since formed, but only on the 1 min chart, this suggests a gap fill attempt. I'll wait for that to occur and then look for the negative divergences once it does, that's where I'll be looking to lock in some short trades. The IWM is probably one on my list and if BAC sets up again, it will be the second. I'll keep using what has been working, short term puts to get some leverage. If a bigger trade sets up then I'll use longer expiration puts.

For now, watch for the gap fill in the IWM.