Micro to Macro

Just as a reminder of the entire picture as it's been 3 days of closed markets, nothing much has changed and this is a reminder of what kind of shape the market is in as Macro-Economic data starts to turn to the downside with negative surprises which happened during Q1 of 2012, but around Feb-March, now it's started a bit earlier, that was where we built the core short positions, all of which were at double digit gains (with no leverage) by late May (the move down starting May 2) so that was a nice setup and move, but still took some patience as the market was VERY much like this one now with lateral price and multiple attempts at new highs or slight new highs through that period. The turn of Macro-Economic data during the seasonal adjustment period (that benefitted data with arbitrary adjustments for at least the first 2 month of the year) seems to have started earlier this year.

 This is the SPY this morning and from Friday afternoon on an intraday 1 min chart, it was negative on the open and just barely positive, really closer to in line at the a.m. lows today, it's really not very strong here.

Take a look at the same time period a bit longer and you'll see the upstream swim it's making.

 The last intraday top was met with a negative divergence and led lower, even though the SPY's price is slightly higher, the 3C reading is not confirming.

Take an even longer look at the trend in this timeframe...

 Since some accumulation at the far left, the divergence has been leading negative as the SPY makes higher trade in a thinner range, sort of like a wedge.

 The local 5 min chart which is more important to the sustainability or bigger picture is clearly negative and has been getting worse.

The big picture on the 60 min chart shows were the negative divergence was at the QE3 announcement vs the leading negative we are in now, the wedge look to price can really be seen ever since trend #1 (up ) started.