A Look at the Market Averages From Friday to Present

Most of us think of the market in terms of, "Whoever owned the Q's long Friday, got slammed" (I just used the Q's as an example, use the SPY or whatever), but when a entire move lower is accumulated you have to average that entire move, average any gaps down that may have been accumulated and the market doesn't need to move that much for these larger institutional traders to make money, it is dollar cost averaging, but it's done by people who have the firepower to maintain a bid under a large, expensive market like the SPX and NASDAQ futures all night, so their dollar cost averaging is a much different strategy than ours as they have the firepower to move the market short term and we don't.

So I mentioned several averages (other than just ES and NQ) also had positive divergences in to Friday's plunge, lets look at them and my guess is that whoever was an accumulator through that "Blood in the streets" mini-episode, has probably made a profit on the trade by now or they are close.

The bigger question for us is the other risk assets that held up Friday and didn't follow the market lower, they are in a different boat and may be signaling a more important aspect of this market's underlying trade or something in the negotiations we aren't aware of.

Oh and by the way, whoever was accumulating ES and NQ (SPX and NDX Equity Index Futures) on Friday during the plunge, with that move averaged out, they are in the green on the trade as both market are mere points away from the point just before the plunge as thy continue to move higher since pre-market.

 DIA Thursday and Friday (1 min), but the important area is the late Friday plunge and the positive divergence holding through the entire plunge. The Dow is just moving in to the green, still a distance away from pre-plunge levels.

 The QQQ though (like the NASDAQ Futures which were the stronger of the two futures) are nearly at pre-plunge levels.

 And Friday they maintained a short term positive divergence through the plunge. I almost though to myself Friday, 'This can't be right!", but here it is right in front of our eyes, hopefully this tells you something about how our markets work, even in the face of zero progress on the cliff, they took a position, they are going to make money on it and probably already have.


SPY positive 2 min through the Friday decline.

I'll let you know what opening indications look like soon, Congress should be back to work any minute now.