In essence as this Euro-Group/IMF/ECB meeting goes on, we are hearing several proposals that have never been heard before, therefore the market hasn't discounted them, there hasn't been a resolution so the market doesn't know how to discount them (up or down) and we are seeing one of those rare moments that the market actually works as it should and isn't (as far a I can tell) manipulated, it's showing indecision because it doesn't know how this is going to end.
Here are some examples among the major averages and which way I tend to lean...
The DIA intraday 3 min chart shows 1 positive divergence around 11 a.m. and the rest is pretty much moving in line with price, except a small negative divergence later in the day, many times this can be market makers/specialists adjusting inventory/risk.
The problem is although we had already expected a pullback last week based on last week's charts, this 5 min DIA negative divergence is in addition to last week's charts, it happened today. When I'm in doubt I tend to gravitate toward the longer timeframes. However a case can also be made there that we have a very positive divergence in the cycle that has been under construction the last month+ that looks like this...
This 60 min DIA chart is much higher probability, if I have to take 1 position and not touch it for a month, I'm going long without a doubt and that is how many of us are set up for this timeframe. It's the pullback that is in the right place, sent out good signals and is deteriorating even more today that is caught in this Fundamental news flow as it happens in the EU.
If I have to take 1 position over the next week and not touch it based on what I see above, then it's short for a pullback move. The 5 min is more important than the 3 min, but the 60 min is infinitely more important than the 5 min. This is the web we try to navigate every day, today just happens to be extra difficult as news is effecting the market as it happens from the EU.
IWM 3 min, this looks better than it should, but still a 3 min chart.
The 10 min saw a lot of deterioration today alone. All we have is probabilities, not crystal balls, so I'm more apt to stick with the near term probability of a decline/pullback based on this chart, followed by a much stronger/longer move to the upside.
QQQ 2 min has improved to the point where it is in line or in confirmation of the price trend.
The longer term 5 min has seen more damage today than last week.
This SPY 1 min looks almost perfectly in line and it is intraday because the market doesn't know how this resolves.
The same chart zoomed out though is in a leading negative position, thus the expectation of a pullback early this week.
The 2 min chart saw a positive divergence at 11 a.m. like the DIA and then moved to in line/confirmation.
However the longer charts that are more important with less noise show more deterioration today than was present last week.
Interesting... Always something new.
No comments:
Post a Comment