Market Update

Like I said, I don't recall seeing a market this screwy since 2008/2009 and back then there was a lot of F_E_D Plunge Protection Team intervention. Those of you who know David DT, he and I were trading together back then and we could literally call PPT intervention within 10 minutes, all it took was price moving toward a break of support and they were there. I don't know if we are seeing similar action from the PPT, they seem to have been out of action or not needed since all of the F_E_D's LSAPs, but there's definitely a hint of that same craziness going on now.

This market update from yesterday shows the extent of the positive divergences we saw in the afternoon that are not as clear now due to scaling and then how fast it fell apart. You may want to look at those two posts.

So here are what seem to be the key charts right now, what I'm really trying to watch for is anything slipping in to a timeframe quickly that changes the complexion of the market, the market is moving fast enough that it could do that and today's move lower is the type of environment that it would occur in. These are more important than just intraday updates, these are the pieces of the puzzle to understanding what smart money's take is on QE3 and what they are doing.

 The DIA 1 min chart was the closest to in line yesterday...

 Obviously it went negative today around 11 am and dumped from there, that leading positive divergence in place now needs to be treated with caution as you may recall yesterday how quickly they formed, moved price up and then fell apart, if you don't recall, I linked both posts from yesterday above.

 2 min DIA relative negative divergence and another leading positive-they were on 2 and 3 min charts yesterday as well.

 The 10 min is one area I'm watching to see if a divergence sneaks in, so far it was looking decent yesterday, went negative at today's highs and right now is in line, no positive, no negative, but a key timeframe right now.

 IWM 1 min looked pretty positive yesterday, it went negative in the afternoon and again around 11 today, there's a hint of a leading positive divergence now, but recall again what happened yesterday.

 IWM 3 min shows the positive trend that was part of last night's analysis that we'd see a move higher in the averages after drifting lower since the 14th, it went negative near 12 and is in line with price right now.

 The 10 min trend since QE3 has been negative or in line with price, there is a relative positive here that is what I'm concerned about in so much as they may form very quickly and change the complexion of the market.

As an example, mentioned last night, the 30 min charts were and are very ugly with this leading negative divergence. The way things stood yesterday a bounce seemed likely with this 30 min negative capping the move off to a bounce. If longer charts like 10-15 min start going positive, it could change that view, this far though this looks like for the most part, the price action since QE3 has largely been distribution.

 QQQ 1 min, is leading positive, I need to look at AAPL as I'm sure it has something to do with it.

 The 2 min is starting to lead positive, the negative around 11 am today is clear.

 5 min is more or less in line, but I'd say overall still in a positive position for the kind of move described last night.

 And remember I mentioned 10 min charts looking ugly, here's an example of a leading negative 10 min QQQ chart, but there's some relative positive action that developed at today's lows.

 SPY 1 min isn't doing much

 Nor is the 3 min, this is the kind of bifurcated market signals I have mentioned.

At 5 mins today's lows formed a relative positive divergence.

So the point is to keep an eye out and see if the drop in prices today was volatility or specifically caused to accumulate a larger position at lower prices, it has a large impact on our analysis moving forward.