Where to Start

There are so many different areas to cover  think I'll do it in bits and pieces, but try to recall these posts as they kind of fit together.

As for the 1 min veneer today, the DIA as mentioned several times had worse looking charts than the rest of the market and the DIA is not the best example of the 1 min strength, the SPY is, but pay attention to the 12:30-12:45 area on the charts of the two, the QQQ is a different story altogether.

 DIA didn't really look good from the start, but just as a reminder of the utility of the 1 min chart, it's intraday moves that it's calling like the negative at the far left sending prices lower, the positive in the middle sending them higher and the negative at the right (red arrow) sending prices lower. When we get in to leading negative divergences like you see in the red box to the far right, these are much stronger signals than the relative divergences to the left.

From this 1 min DIA chart, you can tell where the signals go from intraday to something stronger, uglier and more important.

 If a divergence is strong enough, then it will move to the next longest timeframe which is the 2 min chart here which starts to lead negative at the 12:30 area today.

 If the 2 min divergence is strong enough it moves to the 3 min chart and the first sign of that is at 12:30 on the 3 min chart, then leading negative the rest of the day.

 The 5 min chart is where signals go from intraday to more about heavier flows, but this chart is still (in most cases) being fed from the earlier /above charts). From Friday we see a relative negative divergence at 12:30 today, intraday alone up to that point, the 5 min chart was making higher highs in price and 3C (green arrow). Since the 5 min chart takes a lot more pressure to move, a relative negative divergence at 12:30 today makes sense, it wouldn't be leading negative from a situation like this because it takes a lot more to move this chart.

 The DIa 10 min chart also went to a relative negative divergence at the same time, around 12:30 and was in leading negative position through the close.

Now the SPY, this is more of the veneer concept mentioned in the last post.

 A little confusing, but a 1 min chart that initially goes negative until about 12:30, I doubt it's a coincidence this time keeps popping up, then it starts making higher intraday highs, not strong enough to pass the 11 a.m. 3C high, but apparently getting some support and as mentioned toward the end of the day that chart started to go leading negative around the same time as S&P futures (1 min)...

By 3 pm they could be identified as leading negative, but there was a failure to make higher highs around the 12:30 to 1:30 area and this was in an already established larger relative negative divergence from the time the European markets opened.

 SPY 2 min is negative on the open with a relative divergence and price drops a bit, then a deeper negative at, you might have guessed it, the 12:30 area. The rest of the day it stays in a leading negative position.

 This 5 min chart has more history so I could show the larger moves it calls, rather than the intraday, like the negative at the highs of 1/17, of course we want to use as many timeframes to nail down specifics and as many assets as well. There was NO positive in the entire yellow area, although 3C was roughly following price, but again went negative today around 12:45 and stayed in a leading negative position.

More or less as I was trying to convey in the last post, the only chart that seemed to be lending any support or moving up is the 1 min and that even stopped late in the afternoon along with the ES chart nearly the same time. It seems like something happened at 12:30-12:45 today, exactly what, I'm not sure yet.

As for ES...(S&P futures)

 This chart is backed up about 2 hours and shows an overnight, large relative negative divergence from the time of the European open to somewhere around the 1 pm area.

 This is the same chart, but current at least to the capture, the point was to show some kind of scale so you'd realize that the leading negative at the afternoon today was more than just an intraday divergence, it's quite a bit lower than 3C at the European open at the far left of the red arrow.

I will get in to Leading Indicators, but the quick and dirty way is to look at Context and it is picture perfect considering the charts above.

On the left is the SPY model in green and the SPY in red, it's an arbitrage model showing what the normal price would be based on the correlations that drive the SPY, if the SPY (red) and the model )green) are moving together, there's nothing strange or out of place, it's a healthy trend and nothing to be suspicious of, however that wasn't the case today, the model was significantly lower than the SPY, the Histogram below shows how far they dislocated from each other.

On the right we have the ES (SPX futures) model in green and ES in red, during normal market hours today they did the exact same thing, the model was significantly lower than ES, this means risk assets were not playing along with the SPX, Credit, rates, etc. There was something wrong or manipulated in the market which is what 3C was showing above.

The size of the divergences between the models and SPY/ES today are huge.

I'll deal with the NASDAQ and AAPL in another post as they were a different story today.