Closing Market Update

Most of today we've seen short term positive divergences, what we suspected to be the most probable outcome in oil and USO came true (so far) and we have some more information that we didn't have Friday such as an accumulation period, it's fairly decent, but it's not very large, it doesn't seem to be the kind of accumulation large firms would engage in trying to play catch up to QE3, it struck me as an ordinary swing type move-worth playing but probably would need a little leverage to make it worthwhile.

Now to see what the negative divergences look like on any price strength, do they get worse? If so then we can probably safely assume that our long term charts are still valid and QE3 had already been baked in the market. If that's the case, then I've included some of the longer term charts.

 DIA positive divergence on the 1 min gaining momentum today is always a good timing signal.

 On the other side of the coin, we have long term chart damage like this 60 min chart, if rising prices see these longer term charts see more damage, then we have a pretty good idea of what is happening at higher prices, not buy and hold.

 If that's the case, then the big picture charts are still very much valid-DIA 60 min

 The IWM was the most enthusiastic today with a 1 min leading positive, the R2K/IWM should be the leader of any risk on move.

 However not far away at 5 mins, we have leading negative charts. This is why you may need to be nimble, being the positive divergence isn't migrate to the 5 min chart, it's not as strong as it would have been and I would expect most decent moves to make it to the 5 min chart.

 IWM 4 hour big picture with  large relative negative divergence from February as well as a leading negative position in this leg.

 QQQ 1 min wasn't too far behind the IWM on the 1 min, but there was a definite difference.

 At 5 mins he QQQ couldn't make it to a positive posture here, this is one hint, the positive divergence just isn't that large.

 QQQ 4 hour chart, pretty ugly leading negative

 SPY 1 min looks good for a pop...

 There's not even a positive on the 2 min chart...

 The SPY 15 min , even ignoring pre-F_O_M_C date, this is a definite weak point in the market as of now.

 SPY 4 hour with quite a few negative divergences.

As for oil...

 Here you see the close yesterday, even though crude moved up after the close, I suspected it would be brought back down to this area to allow a stronger round of accumulation.

 That's exactly what happened with the 1 min CL/crude futures overnight-green arrow is the European open.

 The second half of the crude chart, you can see a positive divergence near the lows as suspected yesterday.

USO shows before the fall and after with accumulation yesterday in the afternoon and again today with prices in the zone, which they would not have been if sellers didn't come in to the futures market overnight to drive crude back down. Not every decline is bearish, not every rally is bullish, above all, price is always deceiving.