Market Update

On the 1 min intraday charts the SPY, QQQ and IWM have intraday, smallish negative divergences, for the most part nothing in the 2 min timeframe is disturbed, in certain instances like the Q's, the 2 min chart is just flying.

QQQ 2 min

This is one way we judge whether a divergence is just the normal intraday movement as there are very few instances when a market just moves in a line or if there's something developing we need to pay attention to. I see this as a normal intraday move.

As for where we are...

On an intraday basis or say this morning in pre-market, it often seems like the market is moving much more than it really is, that's the emotional component used to swing traders out of positions and in to losses, but if you look at a moving average of the SPY on a 10 min chart, you can see the trend rounding up, I think at some point soon it will be more vertical on the right side/upside, but as the process unfolds there are these dips and bumps that make things seem a lot different than they really are.

For instance, it feels like we've been in a nasty, nasty market the last few weeks, listen to the media and you'll know what I mean. However, since the QE3 top, in two months the SPY has only lost about -5.68% and that in 2 months, the media makes you feel like we lost that in a week, in fact we have lost about 3 times that in a very short timespan in 2011, this market isn't falling apart like the media or intraday trade, even day to day trade sometimes makes you feel. I believe it will, but I also believe there's a reason it hasn't done so yet and that reason was expressed some time ago.

I think at this point, it's important to keep your eye on the charts and timeframes like I just posted, something is brewing and I think it will probably be more extreme than we even expect.

I've been approaching long positions from a more speculative basis as far as risk management goes, but I do believe some decent money can be made on them, I would just try to not let emotions sway you as you might have felt when you saw the futures this morning before the market open.

Yes, we are guessing as to what is most likely to happen, to say you know for sure is to be dishonest, but we are making those guesses based on real information, real proof and on information most people don't see and if they did, wouldn't understand.