Futures Starting to See More Important Movement

The intraday futures signals are great, I wish I had the money to trade S&P E-mini contracts because I think the intraday signals are solid enough that I could make some real money trading intraday trends, but for our purposes right now, it's kind on like last week, we want to see the longer term timeframes deteriorate which they had not done until today, they had remained in line with price so this is a potential important development (I say potential because it's early in the moves and early moves can be noise rather than trends, but I think there's enough evidence to suggest this is an early trend underway and we know that these charts-like a 15 min ES- "can" move very fast when they are ready to). It's obvious to me that these trends were not going to significantly deteriorate until we had the breakout move we saw yesterday (I'm referring to the IWM more than anything, but it is kind of the poster child for the rest of the market).

 Now with that breakout move having some meat on its bones (it may not be complete as I mentioned last night, there are some areas where it could be more convincing), these longer term charts are in an area where they can or cannot give the signals we are looking for, but at least they are in the area in which that is possible.

So here's what we have so far...

 ES 1 min, just as the early a.m. 3C action suggested, ES has lost ground on that relative negative divergence (relative because it i measured using 3 relative points, each of the peak highs).

 ES 5 min is now starting to show the deterioration I'd like to see to stay on course with our trend table assumptions, it was not likely to deteriorate until price made it to the area in which was likely being targeted (yesterday's moves-maybe a bit more today). You can see a longer term relative negative divergence, but for our purposes, the near term relative negative to the far right is more useful and what it does from here.

 ES 15 min chart has been in a leading negative position, however if you trace the 3C highs in the red box you see they each moved higher successively with price (confirmation on a short term basis) and then the last one is making a lower high, so this is the migration of the divergence in ES unfolding. As I said, it's very early so 1 divergence could simple be noise, but we are in the right area for it and there are multiple charts showing the same trend unfolding.

 ES 30 min is just making a relative negative divergence, this is not very strong yet and it wouldn't be until the earlier timeframe deteriorate and migrate to longer charts, but it is a change and it is in line with the other timeframes above.

NASDAQ Futures

I didn't post it, but I did tell you the 1 min NQ chart had a negative divergence in to the open as you see above and price has responded to that so far.

 The NQ 5 min chart showing a failure to confirm as it had been doing and showing the first small leading negative divergence.

NQ 15 min chart also showing weakness in a relative negative divergence, close ro leading like the 5 min, but not quite there.

So far so good.

Just for giggles, I thought I'd post 1 of many charts that were giving us a negative signal at the time QE3 was announced, it was a big event, the signal was not only contradicting price action on that day and the next, but more importantly it was contradicting the "Conventional Wisdom" and everything people believed about Quantitative Easing and the mantra, "Don't Fight the F_E_D!". Looking back it seems very clear, very obvious, but you have to put yourself in those shoes at that moment (this is why I suggest keeping a trading journal/diary so you can go back and see how you felt emotionally at the time which you may not appreciate by just looking at a chart) , at the moment we saw an initial surge in the market on the day, we saw an additional gain the first half of the next day which all seemed to indicate the market was responding bullishly to the statement of QE3 (but please remember what I always warn about with anything F_E_D related, the initial knee-jerk reaction is almost ALWAYS WRONG) as most traders expected and then we had about 6 days of uncertainty with the market traveling sideways in which each day was a long day for all of us with many thinking the market could breakout on the QE news at any moment, FOR NEARLY A MONTH! Put yourself in those emotional shoes and you can see why it was hard for many to take the 3C signals at the time with confidence, but then all of the QE gains were erased in a single day and the market trended lower and has since then until the recent bottom/bounce of 11/16, BUT EVEN AFTER THE INITIAL QE GAINS WERE ERASED, WE STILL HAD NEARLY A MONTH OF THE MARKET CHOPPING SIDEWAYS-A LOT OF UNCERTAINTY FOR MANY PEOPLE.

SPY 60 min chart is negative in to the QE3 announcement (white arrow) as were a number of charts, you can see the initial knee-jerk move higher followed by a choppy lateral move of almost a month and then the decline.