Market Update

Keep in mind that these market updates can very well have a lot to do with AAPL's earnings, IT DOESN'T MATTER WHAT AAPL'S EARNINGS ARE, the market can create short term sentiment any way they need it to get the position they want to get off. If Wall Street wants AAPL earnings to be taken as positive, they have many ways of moving AAPL higher (market makers and the bid/ ask; phantom flash quotes; short term accumulation in the open showing volume; CNBC -Yes I'm serious), so always think in terms of the bigger picture. We know the evidence still points to the next trend that already started as being a down trend, but we did expect there to be upside noise and head fakes even before it tarted so don't be surprised, just use these moves to your advantage whenever you can.

Intraday there looks like there will be an afternoon reversal, the media will likely play it up as AAPL excitement, but there's almost always a meaning and a reason for these moves even when they aren't apparent immediately.

As yo can see and as I often remind you, reversals are almost always a process, not an event. As the market is fractal in nature, you have to scale the reversal to the timeframe we are dealing with, that's why I didn't feel late putting out the XIV idea a member asked about, there's time (more often more than you might otherwise think).

My original expectations from yesterday morning and last week...

 Here's the bear flag in the SPY, nice and obvious. As of last week our trend projections were for a shorter term trend (relative to the other trends) to the down side, but it would include noise, not just be a clean move down. The short term trend would likely break below the bottom of the bear flag drawing in new shorts. As of yesterday morning I suspected we'd see a move inside back inside the bear flag as part of the noise and shakeout, I expected this to be at least a 2 day move even though we entered the bear flag yesterday. We could still see volatility in to both gaps or even at a new high, the point is the pullback move will eventually hve to be strong enough to convince shorts the next leg down is starting so we'll have to see a deeper move below our current lows.

Our next trend we expected was the continuation of the sub-intermediate trend up, it would likely move above the bear flag in a very volatile manner with short covering including new shorts that aren't in yet on the break lower we are still expecting in the short term trend.

Finally the long term Primary trend down would re-emerge and we'd see new lows in the market, we are still a ways off from that and I suspect at a noise area of the short term down trend or extreme pullback move, it will need to be convincing to bears who have been chewed up recently so it should be quite ugly on the downside when all is said and done.

Here are the gaps and in white the new high, these would draw in longs and on the return move down (as this would be noise within the trend), the longs losses and selling would accelerate the move down, which is what we'd like to see to give shorts confidence to enter the market so they can later be squeezed as well.


As for the market updates...

 DIA 1 min has remained in a leading positive position all day today, this has migrated to some longer term timeframes.

 The DIA 2 min is also leading positive intraday today, this suggests a decent intraday/ day to day , move up from these levels, the current price action os relatively flat, this is to be expected before a reversal as few reversals are "V" shaped.

 Even the 5 min DIA is in a leading positive position today after going negative yesterday afternoon, last night I talked about these short term charts and how they would be important in understanding near term direction within the trend, thus far it looks like we'll see a move higher in to the close or in to tomorrow or both.

 Ultimately though the trend's firewall is still standing firm as a leading negative divergence on an important 15 min timeframe. Despite whatever noise we get intraday or day to day, the trend we should see at the end of this should be a pretty ugly looking move down.

 IWM 3 min leading positive divergence today after yesterday's ugliness.

 We even have a 5 min leading positive divergence today in the IWM, this could build to be stronger with a little more sideways or down price action.

 The 15 min IWM chart is the negative divergence firewall and represents the trend we are looking for once noise is removed, but it is the noise that has been the meat grinder for many traders I've heard about on the StockTwits stream, this is why yo either are trading nimble like some of the trades from today and yesterday or are looking at the longer term and not letting the noise throw you off.

 QQQ 1 min leading positive today

 Also a 5 min positive divergence that has the start of a leading positive move (leading divergences are much stronger than relative divergences).

 QQQ 60 min as shown yesterday is leading negative, this as well as some shorter charts represent the trend without the noise.

 SPY 1 min positive and slightly leading positive divergence today in to lower prices, in other words, lower prices seem to have been accumulated, only to be sold at a move higher.

 SPY 3 min from a relative positive to a leading positive divergence as the SPY moves lower.

SPY 15 min firewall shows the trend and the leading negative divergence.

Understand the timeframe you are trading and don't let other timeframes get in the way of your trade. I prefer to keep leveraged trades short and move out quickly, longer term trades I prefer to use no leverage and will sit through noise with those.