Market Update

This looks to be intraday volatility again, you might ask, "Why is there so much volatility?"

I could offer a few possible answers, 1) Volume has been very low, without volume, trades can't make as much money so the market creates more volatility to force more trades, whether they be stops hit or limit orders triggered.

2) Another source of income for Wall Street and even your own broker is volume discount rebates, if you read your broker's agreement you are likely to see something about volume rebates (money your broker receives) for routing orders through certain channels. So in a low volume environment, the more stops/limit orders that can be triggered, the more volume that can be created and the more volume rebates everyone on the Wall St. side of the street can make.

Lastly, I showed you this morning another reason, to make as many people wrong at any one time, but that all comes back to the issues above.

Here's an abbreviated update being the move already started, but this should give you some context of the move.

 ES with an intraday 1 min leading positive divergence which is one reason I issued the last post.

 QQQ 1 min negative from earlier-no confirmation, this appears that 3C is in line with price.

 The 2 min was negative on the open, which you saw earlier, there's a slight leading positive divergence as of the capture.

 QQQ 3 min, this is what I think the move is largely about, nearby support and a relative positive divergence at that support. A relative divergence is not as strong as a leading divergence which are represented by boxes rather than arrows.

 QQQ 5 min, you can see support at the red trendline and the relative positive divergence in the QQQ as distribution from earlier timeframes didn't do enough damage to the QQQ intraday to send the 5 min low enough that it would not be in a relative positive divergence when it reached nearby support. This ultimately looks like more choppy activity, but there's always the risk of obvious resistance setting in and a head fake move above that on a shorter term timeframe as you can see the range above is creating such. So in essence, while the more important implications are how negative the charts are, shorter term, less important, but still real implications could lead to a had fake move which could create some volume, it could also open some trading opportunities for us. I can't say this WILL happen, it's just the more obvious the range and resistance become, the higher the chance as these head fake moves occur on all timeframes.

 The bigger picture-QQQ 15 min leading negative, you can see the size of the positive divergence today at the white arrow vs the leading negative trend, it really doesn't seem like much of a concern, but people get caught up in short term trade/moves so I hope this provides some context. The red trendline represents the support area shown above.

Hopefully this provides context.