Intraday Market Update

Since the last warning at 12:23 that the averages look set for an intraday move lower, we have a very short term 1 min divergence in a couple of the averages, just a loss of downside momentum in a few others. One minute divergences are one of the only timeframes that can either migrate to a more serious divergence that moves the market or can act as a consolidation signal in intraday trade.

My read on the market at this point with the 1 min charts losing downside momentum or being slightly positive in the case of the IWM and DIA, is that we'll see a consolidation (we actually are right now), but the 2 and 3 min charts which would move us out of the realm of consolidation and to actual movement are still negative, so this suggests after a consolidation intraday there's more downside coming.

This would only change "IF" the 2-3 min charts started going positive. In most cases it takes a little time for that to happen and price kind of makes a "U" shape rather than a "V" reversal.

One interesting note is the Futures are going negative on the 15 min chart for the first time since the move up started on 12/31. You may recall this is one of the signals that I was watching for to tell us when the market is deteriorating and close to a reversal.

Today is a POMO day (F_E_D buying of treasuries from PD's which usually ramps the market), we'll have to see if POMO days still have the predictability they use to have that spawned the motto, "Just buy the dip".

As far as other indications, Credit is still moving right along with the SPX, giving no signals at all. The $AUD is more or less moving along with the market, maybe a bit more negative bias. The Euro started to fall just after 12 pm and is still moving down, not a huge move, but it may be enough to keep some pressure on the market intraday. Yields remain negative, but are moving in sync with the market, just at  worse relative performance (negative) and commodities continue to act badly, earlier they were right at support from 1/4, now they are below it.

Now it looks like the next intraday leg down may be starting, I need to keep an eye on those 2-3 min. charts.