I received an email from a member this morning describing the market as "Chaotic" thus far today, this is short of what we were expecting and I'm leaning to adding to the short positions already started (longer term positions, not the in and out trades) on any strength, even if I have to sit through some draw down. The situation in Europe really needs to be covered in its own post with a lot more detail, but things are unravelling quickly.
Take a look at the Q's
The volume in the QQQ yesterday makes sense as it rolls over, however the member's description of "Chaotic" really struck home looking at the volume in the red box.
Here's the accumulation on a 1 min chart for Tech rotation from Monday and the distribution in to any form of strength yesterday.
The 2 min chart shows this trend more clearly.
And it is now leaking in to the 5 min chart.
The DIA 1 min looks like it wants to fill today's gap, after that, it's anyone's guess here.
The depth of the leading negative divergence on the DIA 5min surprises me that we haven't seen more damage on the 15 min chart.
The IWM 5 min chart is the worst looking out there on a leading basis and a relative basis.
SPY 1 min has made no attempt to follow price higher in to the gap this a.m., this is typical of the distribution seen on the last 3 failed bounces.
I suppose I am still looking for that 15 min chart to fall apart, until then I will be looking to selectively add positions with wide stops so I can add to them if more strength materializes as those 15 min charts are still holding up.
I don't think the signal this time will be as clean as the last 3 failed bounces, we have options expirations as well, I need to look at the chain and see if there's a likely pin.
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