Futures, volatility and patience

Here's a look at the Futures charts for the S&P and NASDAQ as well as the TICK chart, you'll notice in the TICK we are seeing the kind of volatility there that has been absent and this is what I was talking about last week when I said the "Snake's back is broken, but it can still whip around violently", the snake being the market trend. We don't want to get involved in the back and forth "violent volatility", unless there's a real edge and charts are lining up, we'll have to see how much the situation on the ground in Italy influences the EUR/USD, but one thing the charts were dead on about as of late Friday was early strength this week that we'd want to use to sell the calls in to-at this point even if the market ran 2% higher from here, it would still be much better to open a new position than to have held those calls any longer.

After an overnight ramp in the EUR/USD after a flat open, you can see 3C go negative on the pair around 9 a.m.-ish today and a positive divergence developing as the market pulled back from those opening gaps.

 ES 1 min also went negative around the same time, this is where I said I might consider a put, but I just feel there's too much volatility and just not a clean enough entry here, if the market breaks lower from here our core short positions take over and we wait for the next clean signal.

 The 5 min ES is negative and this is where we have been using the divergences as signals for the 1-2 day weekly call/put trades, but this signals is much smaller in duration than past ones, I personally don't think it's worth the risk unless you are a super nimble day trader.

NASDAQ Futures going negative in to the open and a slight positive divergence that could be forming here

 The NASDAQ 5 min negative divergence looks horrible, it would normally be a sign to enter puts, but for me it's too early, the signal doesn't have enough duration, it's just not with the risk here.

The TICK as mentioned has been getting a bit more volatile from the recent past when +/- 750 was a normal day, at least we are getting some extremes, but I suspect these are going to reflect in price both ways as well, not the whiplash we want to be involved with here. Again if the market cracks and just doesn't stop on the downside, all of our core shorts we have been building take over, that is what they are meant for. I don't feel confident we are at that point yet as I looked at some key bellwether stocks.