Picking Up From Friday

Before we even get to opening indications, some context is important. Friday I was trying to determine whether I wanted to cut back on leveraged longs put together during the range from the 22nd-26th/31st.

Then late in the day there were a lot of fast improvements in averages, stocks, and credit.

Here's a perspective of what I didn't like initially that had me considering selling some of those leveraged longs and then what changed later in the afternoon Friday and where we are now.

 The first chart on most of these are a 3 min chart, a longer term intraday chart. The second chart are faster mostly 1 min charts, they will be the first to show changes in character intraday. Almost all of these charts look the same so I don't think that's coincidence, but the gap up opening on Friday was in to larger 3 min negative divergences, this is a head fake move, now whether a day long move or something more important was the question late Friday. As you can see with a head fake move (this is a typical characteristic) they move quickly from a bullish gap up and reverse quickly as we saw Friday.

 What was interesting if you waited for it was a lot of charts as I posted Friday just started getting very positive on the faster short term charts late in the day, around the same time I was considering whether to close longs or not, this shows how the 1 min chart did not confirm the downside move and stayed in a leading positive divergence, a fast change of character late Friday. All of the charts below have the same theme.

 IWM 3 min from Friday

 IWM 2 min in leading positive position later in the day.


 QQQ 3 min

 QQQ 1 min later in the day in leading positive position.

 SPY 3 min

SPY 1 min later in the day in leading positive position, it looks like something changed later in the day.

We'll take a look at opening indictions.