Market Update

In the last post I said the following...

"After a quick look around at some of the averages, some of the core short positions, etc. I certainly think the near term doesn't look good, but there are a lot of gaps that look like they will see ugly trade as they are filled, what is holding me back from entering any shorts, puts, add to positions right now is the question, "What happens after the gaps are filled?".

We are still very early in the day and I'm not convinced that the gaps are filled and the market keeps moving south, I am fairly well convinced that the back of the uptrend is broken, but there's still a lot of opportunity for whiplashing and it's the position of some of the charts in timeframes just beyond the gaps that have me concerned not about the market's disposition, but rather timing in negotiating those whiplashes.

I think patience is still probably the best posture right now."

Now we are seeing exactly that, this is the first part as the gaps are filled or thereabouts, the futures and leading indicators will round out the rest. "If" I was extremely aggressive I might play some calls on the Q's, probably the SPY, maybe the IWM, but I do not think this is ideal territory for trading, I think it's ideal territory for being patient, taking some notes and putting some pieces of the puzzle together to move toward the high probability trades.

Here are the intraday charts doing what I thought they'd do.

 DIA is positive from last Friday which is why we thought (at least is one reason why we thought) the market was higher early this week, the gap up saw intraday distribution filling it with a positive divergence just after it was filled.

 The IWM looks a bit different, but is the same exact story.

 The Q's have been more in line this morning, but are moving to an intraday positive position.



And the SPY is like the DIA/IWM, negative in to the gap up, positive as the gap is filled, this is why I'm urging and trying to stay patient, so far the market is acting as suspected and I suspect there's some upside, but I don't like the risk:reward profile as of now in chasing after that, we have had much stronger trades by being a little patient.