Bigger Picture Update

*I accidentally published the Leading Indicators post before it was done so there will be a follow up, there are some good tools and concepts so I don't want to skip it.


We have very slight positive divergences in the futures and most of the averages, but they are very limited. The TICK is also signaling higher prices.

GOOG looks like it will be ok, but I really don't anticipating holding it very long at all.

I'll use the SPY as it one of the best looking, which is not to say much.

 SPY 1 min is not positive, but rather in line, most positives that you will see are relative divergences.

 SPY 2 min went negative in to the highs of this morning, the only divergence here is a relative divergence which is the weaker between relative and leading.

 The 3 min chart is the same story as the 2 min above, negative in a bigger way in to the highs of this morning with a relative positive as prices fell.

 The first timeframe outside of intraday where we see institutional activity is the 5 min chart, here you can see it also was clearly negative in to yesterday's move and today's highs, I suspect 3C will make a lower low shortly which will not be good for the SPY, especially if it is bouncing as it is presently.

 This is a wider view of the 5 min chart or "trend", again since the 5th (which looks very strange just looking at price alone) we have a very deep leading negative divergence. Last night I showed you breadth charts that were negative or getting worse yesterday even as 3 of the 4 major averages were green, this is a major red flag, especially on top of the earlier breadth post this week.

 The 15 min SPY chart still shows that area that looks like a "W", this is where I suspect the back of the trend was broken, even though we have higher prices, it's no different that what I said the day I first posted, "The back of the trend is broken". Even on the first day I acknowledged that moves to the upside were not only possible, but almost certain and the analogy I used was "the snake's back is broken". A snake is usually  very elegant moving creature, smooth, flowing movements, however when a snake's back is broken it whips around wildly, like the market volatility I was trying to convey as well as it being the most dangerous at that point. If you were to assume a snake is no longer dangerous because its back was broken, you'd be very mistaken and in this case, I believe it's very dangerous either way-to the upside or downside so I want to be on the side of probabilities.

The daily chart is one of the longest, cleanest trends, we need other charts to tell us when timing is right, but there's a major problem in the market with a divergence like this.

In addition, as I posted yesterday...the monthly Demark inspired indicator is giving a sell signal, the last major one in the SPX was November of 2007.