Opening Indications

There's what looks to be quite a bit of volatility through out the day, the initial indications from some of the confirming assets I use like short term volatility futures and Treasuries as a flight to safety asset show what looks like early strength in the market-along the lines of the 1 min positive divergences I mentioned in an earlier post this morning, but still that negative tone in the more important charts.

My first thought is we frequently see some type of move in the morning or first half of the day and they almost never have the staying power to last through the close, so if we were to see a big drop this morning in the market, it would be unlikely the market could hold that through the close, we'd almost always see some sort of reversal at some point in the afternoon. Afternoon trade is the most important trade for our analysis and for the market.

I'll show you some of the opening indications and what I mean by the rot in the longer timeframes.

A secondary thought that can't be ignored is op-ex Friday, typically Friday's op-ex close is not too far off Thursday's close, wherever that lands.

Here's a sample of some of the charts...

DIA 1 min is almost perfectly in line (price/3C trend confirmation), this is one of the exceptions.

 DIA 2 min went to a leading negative divergence around noon yesterday and lost ground from there. This morning there's a slight positive divergence on the 2 min (intraday) chart).

 The longer term and more important signal (flow) on a 10 min chart from the positive divergence we expected for the QQQ breakout to the negative divergence once that was achieved and a leading negative divergence sending the DIA lower, this is still in effect and is the most important of the charts here.

 QQQ with a late afternoon 1 min positive divergence and an early this a.m. slight relative positive divergence, the rest of the day so far is in line.

 QQQ 2 min going negative as soon as it makes that breakout we were expecting and in to a leading negative divergence, this still is much more negative than price suggesting price has further to go and this is only the trend of a 2 min intraday chart.


 QQQ 15 min at the last area of resistance going negative, the positive divergence we expected to send the Q's through that resistance level and the leading negative divergence on an important 15 min chart that is currently in effect.

 SPY 1 min with a positive divergence visible late yesterday and another relative positive at this morning's lows.

 The 2 min chart negative at the SPY highs and in leading negative position, the trend though is pretty close to confirmation.

 And again the rot... 10 min SPY relative negative to the left and a slight positive at the white arrow with a deep leading negative divergence in effect now.

The confirming charts, I'll just use volatility to save time and not be redundant.

 3 min from a leading positive sending volatility up and the market down to a negative divergence in effect now, again this is a short term 3 min chart.

 The next timeframe at 5 mins is in confirmation so the negative divergence here is not that strong, along the intraday timeframe.

However get to an important chart like 15 min and we have a new leading positive high over the last 2 months, this is a strong signal and suggests volatility soars, we know the market moves the opposite of volatility.

So that's what I meant earlier, there's a visual. I'm not changing any positions, just being patient and letting the charts develop and let the market tell us.