Market Update

From Sunday night's post, you already know I'm not looking for a correction...

Also, don't forget the oddity of the C&D rally on the lowest volume seen on a non-holiday in decades and what my experience has told me about the market when the Cats and Dogs rally...

Here's another example of traders REFUSING to adapt to Wall Street using Technical Analysis against them.

 The DIA stops being hit at support from late yesterday

 IWM stops, being placed right where the market knows they will be placed, intraday support, intraday lows and yesterday's close.

 The Q's seeing stops being hit early on a break below yesterday's close (often the first area of support traders look at intraday, followed by a morning range if it develops and intraday support/lows). The second round of stops being hit was larger and at both intraday support at a small hammer as well as yesterday's close.  I believe the reason the stops being hit are much larger in volume on the second break is because of the SPY below...

 The SPY didn't break yesterday's close early as the Q's did and as such, traders in the Q's saw that as bullish (SPY holding first support), however later when the SPY did break below yesterday's close, we see the other averages that hit earlier stops, pick up on volume at this one. Also note the little H&S looking top today. I haven't taken the time to do volume analysis and see if it is real or just a random pattern, but most traders never confirm H&S tops with volume as they should, that happened early in the 2009 rally, a H&S top showed up on the daily chart, but if you did the volume analysis you would have seen it was a random price formation, volume DID NOT confirm. Of course with all the newest indicators, traders have totally forgotten about the second most important indicator on the chart, volume.

 Here's 3C opening trade on the SPY, it was negative as the SPY tried to make a higher high in early trade.

 The 5 min chart shows us that a negative divergence has been in place for sometime, actually longer then this, suggesting a large distribution cycle in to price strength.

 Here's a close up of the 5 min chart, also negatively divergent today at the highs.

And a close up of the 15 min chart showing a trend of distribution.