Market Update

To give you a rough idea of where we are in the process, I'll use the Q's as a fuller example and then some of the other averages out to the maximum positive divergence as of now.

Broadly speaking, most stocks will follow the market, even on a short term move like this, although the relative performance will not be equal as breadth has been declining severely since February.

The idea to a bounce or move like this is not to correct an oversold condition, no one on Wall St. cares about oversold/overbought unless they need to restock their inventory, long or short. The point is to make retail traders believe in the move, that means the moves are often very strong, especially in a bearish market or a bear market. Some of the strongest rallies or bounces you will ever see are counter trend in a bear market because they must convince traders that something has changed in the market so they will buy and Wall Street can sell short to them. Often heavy resistance will be taken out as that will convince traders, they see that resistance as an area to go long and volume increases on such a move, this gives Wall St. 2 things they need badly, higher prices to sell short in to and more importantly, demand and volume as their positions tend to be large and if they try to make such a move without volume, they'll just drive prices against them so don't be surprised if a bounce looks VERY strong, that's its job, to convince you and many people will be, even some of you.

 QQQ 1 min with an extreme leading negative divergence in the intraday timeframe yesterday, essentially this was meant to come down. We have a decent positive divergence building.

 Yesterday's leading negative and migration of the positive divergence to the two minute chart.

 Yesterday's 3 min leading negative divergence and a positive on the 3 min chart, so more migration.

 Negative yesterday on the 5 min chart and migrating positive today.

 A longer term view of the 15 min chart, even though we expected a move up last week, I was not excited about it as there was very little accumulation (seen at the white boxes (the move up was due to the lowest volume day of the year on Monday of last week (ex-holidays) driven by algo buying and Tuesday and Wednesday the F_E_D has "ACCIDENTALLY" sent the F_O_M_C minutes out to at least 154 banks and private equity trading firms a day and a half early and at least a full day before any of us saw it; talk about insider trading and just how do you get on the F_E_D's mailing list? I didn't know they provided that service for clients, oops, I mean banks like Goldman Sachs and JP Morgan/Chase.

In any case, the rally last week saw heavy 15 min distribution and today we have a relative positive divergence on the 15 min chart so that's out pretty far already.

 SPY 2 min negative yesterday and starting a leading positive today.

 The 10 min distribution at last week (Friday) and a relative positive today is as far as the SPY goes.

 IWM 5 min is in leading positive position today with a relative positive from the 12th.

 The positive in IWM stretches to a relative positive in leading position on the 15 min chart, again the leading negative last Thursday/Friday in the IWM.

I know some of you are thinking, "Are you sure this isn't the start of a new trend higher?" As I already said, the objective of these moves is to change sentiment from very bearish to bullish, you can imagine what that might take, but as far as the question and objective evidence...

The 60 min (an exceptionally strong timeframe) with a huge leading negative divergence and this is just the first one I grabbed, there are many worse and as a bounce proceeds, you'll see the charts going negative as there is distribution and short selling in to higher prices.