A.M. Indications

I really don't like signals that come from a.m. trade and especially on a Monday, but it's what we have right now, for now.

There's very little underlying movement in NQ and ES futures, a bit more in ES.

 ES 1 min since the open

NQ 1 min since the open.

What is more of a mystery is the averages, there's an inconsistency among them in different timeframes. I fully expect there will be some kind of relief rally or bounce on the resolution of the Sequester which I think has to come at some point, however last night I pointed out the larger nature of negative divergences last night and I'm wondering if this is an early sign of the amplitude of volatility getting ready to increase, this would still be basically non-directional, it would increase the size of the days up and the days down, almost like a broadening top, just with less direction.

So far that's just a guess and a guess based on some of the most inconsistent data out there, Monday morning charts.

Each average is a bit different, some are more bearish than others, some are more neutral than others, the iwM is probably the best example so far of the possible theory of increasing volatility/amplitude. I really feel like I shouldn't even be putting this out based on Monday morning data, but I have to call it as I see it.

 IWM early charts are all basically negative, remember that divergences flow from the shortest charts and if the divergence is strong enough it moves to longer charts so the IWM example may be a moot point if the migration of the early timeframe divergences continues.

The 1 min above is leading negative

 The 2 min above is leading negative


 The 3 min is leading negative

 The 5 min is leading negative, so at this point things look as they should, we have a negative divergence migrating through the longer timeframes in a rather flat range.

 At 10 mins though we have a chart that is nearly in line with price, there are small divergences here and there, but the main thing I see on this chart is a more "in line" status.

At 15 min is looks more positive with higher highs in 3C.

If the 10 min chart goes negative next, then we have normal migration of a divergence and the 15min above would be targeted next.

There are several variations of this with strength or at least in line charts in the middle region of 10-15 mins and then some with negative charts after that at 30-60 min, as I said each average is a bit different, but they mostly all have negative 1-5 min charts and then go different direction in the 10-15 min area, some negative.

So I'll be watching for this to fall in to some order or see if there's a new trend developing as I suggested above, increased volatility which would be fine for us as long as we can mark the signal as we have been doing with the weekly options, but it will be a real meat grinder for anyone trying to play it directionally by chasing increased volatility as each day or so would have a different move that is even bigger than what we have seen recently. That's just a theory for now, but this is what I've spent so much time looking at this morning.