Market Update

* I may be a bit slow on emails because there's so much happening so fast that I can't really take my eyes of the screen for more than a minute.


I'm going to use the SPY as an example, but it is fairly representative on all of the market averages and the situation.

Short term the market looks like it's prepared to come down a bit from here, we are still pretty early in the day though so I can't rule out choppy volatility.

Try to envision the following charts in this manner, the long term charts like 15, 30, 60 are the most important, the highest probability, they show what the big picture and health of the market looks like, these are negative. Short term charts have been positive recently to hit these targets in the IWM and QQQ, but they are starting to deteriorate, they will start to deteriorate at the fastest timeframe like 1 min first and then if it is strong enough they move to negative 2, 3, 5, 10 min charts. The long term is already set in place, so when the short term charts deteriorate, they kind of meet in the middle and it's like a two part epoxy (the long term side and the short term side) meet up and mix and create the effect or activate.

 SPY 1 min leading negative intraday

 That has migrated across and to the 3 min chart so the divergence appears to be real, it appears to be strong and perhaps getting stronger as the target has at least been met in the QQQ.

 The 5 min chart is still in line with price which it has had to be in recent days to keep the market moving up, eventually I suspect the 3 min chart will deteriorate enough that it will effect the 5 min chart and then we are pretty close to extremely high downside probabilities.

 The 10 min chart was already established as negative, it doesn't need to go more negative, but if the 5 min goes very negative then the next timeframe, 10 min should get worse. The 3 min is like the one side headed to the right and  the 10 min chart and those above are like those heading to the left, the 5 min is the only thin wall separating them and when they clash in to each other, we have high probability downside move that we have ultimately been expecting.

 SPY 15 min in leading negative position, it did move in line with the market, but has stayed in leading negative position.

The 30 min chart's leading negative divergence, none of the recent accumulation needed to send the market to the targets on the upside made it to these longer term charts, at best they moved in confirmation of price, they did not go positive.

I didn't include the 60 min because it is redundant.

I can't be sure how intraday trade and the QQQ break above resistance play out technically, whether it's a fast change and reversal to the downside or whether the Q's spend a couple of days in the area, I just know that with the way things are developing, the gut feeling i had that a reversal would be very quick is supported by these charts so far.