Market /Futures Update

The SPY is still looking strong on the move, but intraday volatility can't be and shouldn't be ruled out, it' part of how Wall St. makes money.

We'll take a look at the ES futures which I think are a little exaggerated on the 1 min charts, but the overall analysis is very much in line with what we expected well over a week ago, what developed and what has started today. I still want to take a look at leading indicators and will do that next.

 As mentioned this morning, the 1 min ES chart just looked wrong, especially compared to the more reliable NASDAQ futures chart.


 NQ 1 min futures are just seeing a relative negative divergence, not a big deal for the move, just an intraday volatility signal.

 The ES 5 min seems to show ES, like the SPX being kept in the range and accumulated at lower prices, on the breakout today 3C on the 5 min ES chart is perfectly in line, basically confirming the move as authentic.

The longer and more important 60 min ES chart shows the negative divergence on 10/17 and 10/18 which is where we closed longs like FAS and entered shorts like FAZ, since then as the range has developed, this long term chart has been growing in to a leading positive divergence, this suggests a strong move coming, it's already a strong start.

The game plan is to let the leveraged longs that were entered last week to work for us and as the charts turn negative, to sell the longs and start entering core short positions in bigger size, but as always we'll follow the flow of funds and let the market tell us what, where and when.