Market Update

With yesterday's dominant Price/Volume relationship (out of 4 possibilities) being Price Down/Volume Up, it makes a short term oversold condition very likely. The overnight futures also looked like a bounce today was the most probable outcome. Now that we've burnt through the market chasing orders of morning trade and seen some lateral cupping in price, the intraday positive divergences are picking up. I'd prefer at this point to see a bounce soon rather than let the market move sideways for a longer duration and let the positive divergences build since we already have some very convincing charts and probabilities. This could also give you a chance to enter, phase in to or add to short positions you may like on price strength, reduced risk and likely higher probabilities.

Here's what's been happening this morning in Gold, Oil and the averages.

GLD 1 min leading positive, the 1 min timeframe is the least influential as far as the market's trend goes, but it is useful for intraday moves and tactical positioning.

USO is seeing a 1 min leading positive divergence, this in addition to some larger positive divergences already in place in oil.

  The DIA never confirmed the move down this morning on the open and rather stayed in a positive position on the  1 min intraday chart (this isn't an influential timeframe, but for intraday moves it is useful). Since the open, the DIA has built on that positive position with a leading positive divergence.

 IWM has seen the positive divergence creep out to the 3 min chart, although not very strong at this point, it could continue to build.

 QQQ 3 min positive divergence.

 The SPY 2 min also is leading positive as price flattened out. The divergence could continue to build from here and make a larger move up likely, but I still suspect as of now this is more of a 1-day oversold bounce.