Futures/Market Update

As I pointed out last night, we need a lateral range and there will be intraday volatility, both rallies and declines in that range, but that's how we'll get the positive divergence we need for the upside move I expect. I have some updated charts and examples. The SPY is down .50% which is well within the volatility (especially intraday) for the range as I was trying to express to you last night and prepare you for.

 ES which was negative pre-market and I said I thought it would lead to downside volatility, but also that it is an intraday timeframe, it's not a long term timeframe with bigger implications. In any case, it is positive in to the last decline so I would expect some upside from here.

 This is the SPY 2 min chart improving, remember as I said earlier, to get a positive divergence we need a pullback, smart money is not buying in to strength. The red line is today's open.

 The 3 min chart is in a good position, leading positive and hasn't given up any ground.

 Here on the 5 min, this is kind of an example of how we should see things develop, 3C should start to put in a new high and a stronger positive divergence, the SPY as of now is losing downside momentum and who knows what it looks like by the close, the lateral range can be loose or tight, but I expect it to be more lose, so intraday rallies and declines are part of creating that range.

 SPY 5 min with Rate of change applied to price, as you can see the ROC is positive here as the downside subsides, I still expect chop up and down, but when it is done and you look at the bigger picture the range should be clear, it's hard to envision it now with only a decline and not a bounce in place or more importantly a series of them.

Between each advance or decline there is the process of a reversal, some are more "U" shaped, some are quite sharp like last week's that stayed pretty flat since mid week and then just dropped on Friday, I can't say what the range will look like, but it is important. Leading indicators are stronger now than in past advances so we may have a smaller range.

We'll take a look again at the close or as it develops and becomes more clear. However with the positive ES intraday divergence we should see some upside and that may give us a better feel for the look of the range/process.