Market Update

In last night's Risk Asset and odds and ends post I described what the averages looked like, basically what information post QE3 we've obtained since the move largely down and how the market looks ready for an upside correction, yet there's still no signs of large accumulation which is one of the things I was most interested in with a move down, with a move up I'd like to see if there's confirmation or negative divergences.

As we saw yesterday the short term charts generally from 1-3 minutes went from being very bullish to very ugly (in most cases) very fast as I warned in an update they could certainly do.

The negative action stopped at the 5 min chart and that's where the positive divergence on most of the averages is, while each is a bit different (DIA and QQQ have a little better looking underlying signals on certain timeframes), the general theme is best summed up with the SPY.

 The SPY 5 mi positive divergence mentioned last night, already today it seems the faster timeframes like 1, 2 and 3 min are putting some intraday pressure on the 5 min, I wouldn't take this too seriously as of yet as this is still very early and morning trade which is not the most reliable trade as it's full with manipulations of the market. In any case, you get an idea for the divergence and the timeframe.

 While many 10 min charts look downright bad, this is one of the better looking ones, yet it's still not any better than confirmation of the price trend and it too is seeing some mild deterioration, we'll see if that keeps up.

 Here's what I meant when I talked about the downtrend since the QE3 highs, the 10 min chart could have shown a large positive divergence signaling big accumulation of lower prices, instead it's nearly perfectly in line with the price trend, if not more negative in a slightly leading negative position.

 Remember yesterday how fast and how good the 1 min chart looked with a leading positive divergence and then how fast it totally fell apart? There's no confirmation of price on the 1 min chart this morning and being the fastest chart, it would be the first to confirm.

 The 2 min chart doesn't look good either since the late afternoon deterioration.

This is all migrating to the 3 min chart, which is migrating to the 5 and 10 min charts. I would expect a stronger move up at least on a correction basis as we have moved down since the 14th, but this is the information we need to gather.