Overnight Futures and the open

Last night in this post I showed several charts and what the likely possibilities were which may be summed up from an excerpt from last night's post which the same ideas were also published during market hours,

"I would expect to see the SPY, QQQ, etc pullback a bit and repair the damage on the short term charts and keep the 5 min chart healthy enough to continue the bounce/move higher, if that happens and we see some positive activity in to a pullback, then it will likely offer you an opportunity to take on some long positions to play the bounce/upside, however if price keeps moving up without repairing the damage to the short term charts, it's likely the 5 min chart will see more damage and it will continue to migrate to more important charts; in this scenario, the bounce will look strong price wise, but it will essentially be rotting from the inside out and it would not bode well for any kind of sustained move."

It seems the short term 3C market average charts were correct as I expected them to be and futures moved overnight to make that a reality. You probably recall the negative divergences in futures from last night, here's what they look like on the open.

 ES futures dropped from the 4 pm close at 1441.25 to 1435, actually down to 1432. There's a positive divergence going in to the opening.

NASDAQ futures dropped from 2814.75 at the 4 pm close to 2806.25 and even lower to 2802.

So the expectation of highest probability thus far has played out.

While I would expect the damage to be repaired from yesterday as stated last night, there is the chance that the damage across longer timeframes continues although I see that as less likely, that would effectively end a very short term bounce. We'll monitor the underlying trade, look for any opportunities as described last night and above or if things deteriorate more from here which is the least probable scenario.