Market Report

What I don't like thus far...Within leading indicators, there aren't any moves against the market downdraft except in High Yield Credit which held up much better than the market, in fact it has managed to stay unchanged. None of the other leading indicators are diverging, at least not yet.

In sector rotation it is a little interesting

This is relative performance of sectors, Tech is doing better than Financials, this can be seen broadly in the 3C charts for both groups this a.m., Industrials and Basic Materials look quite a bit stronger than I'd expect as does Discretionary at the top. I find it surprising Healthcare and the other Defensives aren't doing better, I suppose this could be attributed to broad market weakness, but I'd still expect some flight to safety, the fact Utilities are barely outperforming Energy is strange.

As for some other charts, some of these may be getting a little outdated, I'll check on them as they are posted below.

 The charts shown late yesterday showed the 1 min starting to move back in to positive position after having migrated through the timeframes until we had a 5 min negative divergence, the process of that divergence ending and a new one starting began yesterday, whether it would be strong enough to make it to the 5 min chart and turn it back positive remained/s to be seen, but with the longer term charts still positive I think it does.

This 2 min positive in the DIA (I said I was worried they might be out of data since they are such fast timeframes so I check them) has a leading positive divergence as it should progress from 1 min to 2 min, right now this divergence is nearly at a new high so it has become even stronger.

 Ultimately this 5 min DIA negative that is now in line will have to be repaired by the migration of the positive divergence through the timeframes.

 The 15 min DIA saw relatively little damage and still remains in a very strong leading positive divergence, this is why I think the probabilities are the 5 min will be repaired and we'll continue on track.

 We still also have much longer positives like the 2 hour. In proper position it is in a deep leading negative divergence, but there is a change in the flow from the 11th of Oct to present.

 IWM 2 min leading positive is now at a new leading positive high.

 This chart is current -3 min,

 IWM 5 min seeing some positive activity or repair.

 The IWM 10 min chart is very close to the 5 min, it really hasn't seen much damage at all.

 QQQ 1 min is also moving, this is at an even higher point.

 This chart is current

 QQQ 3 min making progress.

 As shown yesterday, the 5 min was negative, this needs to be repaired, this is part of the reason "V" reversals are less likely as it takes time to repair the damage via accumulation.

 QQQ 15 min chart wasn't damaged at all.

The SPY short term charts were not showing anything interesting in divergences, now the early timeframes are starting, but again here you see a divergence as far out as 4 hour.

I'm going to check individual sectors next.