Preliminary Findings...

First let me reiterate that I hate CNBC, we need to have a contest for the best acronym for CNBC. I had to turn it on today to see if I could find news on the very sudden drop in the NYSE TICK index which is all NYSE stocks moving up on the timeframe (1 min) less all NYSE stocks moving down, there was a 1400 point (stock) move in a mere 3 minutes to hit a moderate extreme of -1100 coming from+300 or so. Considering today's very mellow volatility and TICK readings, this move was somethingI'm not sure what caused it, but it was something coordinated.

As for CNBC, they said today was the second down day for the S&P and it's because of concerns over the economy after the horrendous GDP print (and these are the same people telling us the economy had been improving?) How is an economy imptoving when it goes from +3.1 in the previous quarter to -.1 the next quarter and the quarter when business picks up with the holiday season, etc.

Does this look like the market is down the last 2 days over concerns re: GDP?

To me it looks like trend #1, which if you recall we predicted would happen probably close to two weeks before it happened, we predicted that it would be a very strong move, so strong in fact that it would likely surpass our expectations for what we already thought would be a very strong move. The chart looks like the accumulation of stocks before and leading right in to the day before trend 1 started have been under some distribution in to higher prices and then last week the pace of that distribution picked up substantially, so much so we have to assume that it's not only selling, but heavy short selling.

This is how market cycles work, they accumulate cheap and sell high.

However CNBC has become the apologist for GDP, yesterday claiming it was Sandy (but remember that was already factored in to consensus for the print which was 1%, down from 3.1 the previous quarter) while playing these movie trailer sounding segments, "The market is closing in on DOW 14000" Dun dun dunnnn!!! All in a deep voice that would make Darth Vader jealous. Today CNBC is now calling "Sandy", "Super-Storm Sandy" which I assume is something new as I didn't hear it yesterday after mentioning it 30 times.

It's unreal how people crave to know why the market did this or that and CNBC feeds it to them in the form of the lowest common denominator, "The market was worried about GDP", I'm really sorry to say this, but the market is way more complex than a simple 1 line reason. In fact, today the market was likely in short term accumulation mode rather than fretting over GDP because these cycles are planned out long before they start, they are proactive, that is why we could predict them, they are not reactive.

Why do I say the market was likely accumulating today short term? For one we saw it, for two, this 5 min ES chart which was positive late yesterday kept the R2K from plunging 1.15% like yesterday and actually closed up +.55% which is a fairly big move for this low volatility tally we have seen for the last two months.

5 min ES positive is a good short term indication.

Other hints that there's short term accumulation(and I mean short, not short like trend 1), the Dominant Price/Volume relationship (of which there hasn't been one recently) was Close Down/Volume Up for the Dow, the S&P-500 and shared a co-dominance in the Russell 2000 (how you might ask could there be a co-dominant close down when the R2K closed up?-The relationship isn't based on the market average's performance, it's based on all of the component stocks in the average and weighting skews that).

What does Close Down/Volume Up mean? Short term bottom, usually these are about 1 day moves, but pretty reliable, if all 4 averages were clearly showing the same dominant relationship, it would be a better indication, but this is still the closest we have had to a dominant P/V all week.

What else? Tick actually...

 The early TICK data made sense, it moved with the market, it helped us enter the Q's at the right time, but then...

 It got really crazy toward the close, but the trend at the close was clearly TICK moving up wit the SPX moving down, this is short term bullish, maybe a half day, maybe more.

Here on my custom indicator we see it again, look at the LN for the SPY vs the LN for the TICK as well as my cumulative histogram at the bottom.

Also the price/volume action looks indicative of a short term bottom, but why a bottom here and now if the trend is growing more bearish? Because the thing that accompanies tops and bottoms of all sizes is extreme volatility, even if no new upside gains are made, it can move up hard one day, down hard the next, it keeps traders on their toes and guessing or chasing, but it almost always shows up at the end.

As for longer term implication, Credit is the go to asset. Earlier today I posted what was going on with leading indicators, you can compare to these if you like.

 HYG above and Junk below-both added more downside today, this is a longer term indication and it's not good for the market, if you look at the credit trend I've posted every day, you can see the smartest of smart money has been moving out of risk assets for a lot longer than just the last 2 days.

I'll be back with more, I'm sorry, I just get so upset with CNBC, it's like a Disneyland character of finance and misleads so many people in to believing things that just aren't true, you simply can't explain the market in 30 seconds.