Market Update

Here's the latest...

Starting with futures...

These are the 5 min 3C charts of the S&P and NASDAQ futures, they don't have the positive divergence on them that has been working so well with our weekly call/put positions, although volatility is higher now so we could see a move that exceeds our expectations and if we do get a solid move, I expect it will, it needs to keep traders emotionally off balance and extremes do that.


However the strong accumulation on the 5 min chart is not there, this is one reason I opt for less leverage, the other is any long trade is already hedged with core shorts so I'd prefer to use less leverage here given the charts.

 ES 5 min slight leading positive divergence

 NASDAQ futures have none.

 As for the market, as I said last night, a reversal which I thought to be likely in the short term is a process, not an event so the white arrows depicting a "V" shape reversal is not what would be expected, but rather a "U" or even a "W" shape if price pulls back toward the lows of the day.

The size of the base as well as the strength of the divergences tell you a lot about it's ability to maintain, volatility is up and options are going to be more expensive to start with, but the point is we can still have a large move just based on volatility and market behavior in these areas.

 2 min DIA negative on yesterday's highs, in line on the move down and positive today with a short term intraday negative divergence, this is why I'm patient about a possible pullback.

 IWM 3 min with all the same features except the intraday pullback, I may look in to URTY long as a 3x leveraged ETF for a quick long trade, that's the IWM 3x Bull.

 IWM 5 min looks pretty darn strong, this is why I'm leaning toward URTY long and maybe TQQQ-long the Q's 3x leverage.


 The IWM 2 min has a small intraday negative divergence so I'm hoping to get a pullback to lower risk.

 QQQ 2 min with a leading positive today and a relative negative recently, this is the probable pullback signal intraday.

 QQQ 5 min leading positive after a weaker relative positive, you recall how today's sentiment was cautious earlier.

 SPY 3 min

 SPY 5 min looks pretty good here too, the long 3x leveraged is UPRO, remember though these are speculative, short term trades.

This is the reason why, the 30 min SPY, the back of the uptrend is broken, the real trade here i selling short in to price strength, that's where the real probabilities are so you can catch a little upside I think, but that's our real objective.