Financials and Tech

As you know, the QQQ and the NASDAQ 100 did make it above local resistance, which is a good thing for us, it helps identify the turning point, it sets up positions at excellent prices with lower risk and higher probabilities.

The SPY and DIA did not make that move, I cannot see the SPY and DIA SO CLOSE to an area where Wall Street can make all kinds of money (see my "Understanding the Head Fake" articles 1 and 2 to understand how) and the locals not going for it.

The underlying tone today has been poor, not HORRIBLE yet, but I think it will get there. 

The Financial and Tech Sector both seem to show the same overall trend that we are seeing in quite a few places, this is why I'm partial to keeping some of the Call positions open as long as I think there's enough of a chance the move will overcome the time decay on the calls, normally I'd be out of any options position at the first hint of a consolidation or pullback.

Tech and Financials are 2 of the 3 Pillars that are the most important to sustain any move-Energy being the 3rd.

Financials/XLF

 Financials did make the move above resistance so this is a high probability head fake breakout move or false move, but they are still useful and any short term strength should help the Financial heavy (relative to the other averages) S&P make that move above resistance and create its own head fake, which would help us out in several ways-from timing to position management to new positions.

 Look at the tight intraday range in Financials, this is where we almost always see accumulation or distribution, this is why I say these quiet consolidations that seem dull are, "Like the kids being a little too quiet in the room next door", you know there's something going on and we see it time and time again. Above we see an intraday positive divergence right at the flattest part of today's range.

 The 2 min is in an overall leading negative divergence, longer term that is the most important, but short term there's an intraday positive that has migrated from the 1 min chart suggesting intraday upside.

 At 10 min as we see the start of the 11/16 cycle we have a huge leading negative divergence representing trend 2, this should bring the market down below the 11/16 lows when it's time for the reversal.

Tech

 I've heard some people call this a double bottom, this is so far away from a double bottom that I am shocked anyone would say that. We do have the head fake move in yellow at C, just as the Tech heavy QQQ/NDX put in today.

 1 min chart actually looks good here, but as I said since last week (and featured the QQQ call last Friday), the QQQ has seen some of the best underlying trade and tone.

 The 2 min chart is in line more or less and that's what is important as many or most other averages are leading negative here.

However at 5 mins we have a leading negative divergence, again I believe this represents trend #2 (down).

The take away here is that the positives that are in place are very short term and on VERY short term charts that aren't very influential. The longer term charts that represent larger money flows, longer and stronger trends, are all negative (up to trend 2 without getting in to trend 3 and 4).

So I'm still looking for that upside move in the market, but the SPY/DIa are the real ones to watch as they have to surpass resistance to set up head fakes.

As for position management, I'm happy with the Call position gains, if we can squeeze a bit more out, then great, but to have them covered and just letting profits run is a good place to be.

"IF" it looks like there won't be enough of a move or enough volatility, then I'd likely close them and if I felt I still needed some upside hedge protection, then I'd move to the 2-3x leveraged ETFs for that, while they do have their own problems, the time decay and the amount of leverage are two things that are not problems.