SPY Update

For the most part the SPY doesn't look much different than AAPL this a.m. Pretty much all the same concepts apply, however as mentioned last week and for some time, I do think this is the last bounce for the market before cracking, I would say the cliff edge has already broken, Wiley Coyote just hasn't looked down yet.

The SPY daily chart obviously isn't off to a stellar start this a.m., however with recent volatility it can't be considered down and out of the game just quite yet, although I have been shorting in to strength for the model portfolio wherever I can find it. The point is, the recent volatility is so high, a move above the recent highs (above $1400 SPX) still can't be ruled out and psychologically it would be the best bull trap set up before a reversal.

Note the SPX/SPY, even after the horrible PMI this a.m. just dipped enough to take out recent support and trigger a boat load of stops with some short sellers jumping in no doubt, the volume tells the tale. As I said with AAPL, a 'U" shaped intraday reversal would not be likely, some sideways or 'w' shaped price action would be more likely to allow accumulation to take place, with positions as large as Wall Street is running, they need some time.

 The first pos. 1 min divergence has now formed a second on the 1 min chart.

 This is now showing on the 2 min chart as a stronger 2 min divergence as the 1 min "relative" strength bleeds over to the next longest timeframe.

This 15 min chart is where we really want to keep a close eye, it is already divergent enough to say the cliff has broken, I think now it's simply about how the tactical reversal goes down, my vote right now is still for  last volatility blow off move to the upside.