IMPORTANT #2 The Charts

OK, this is the post I've been trying to get out for about an hour, there's nothing that was especially important in terms of trade positions or management, for the most part if you didn't have your trades set up yesterday (and we set up a  lot yesterday) or at the latest, this morning (except in a few circumstances), it was too late, time to just be patient and wait for the next high probability position, we don't chase and for a very good reason that a lot of shorts from yesterday learned or are in the midst of learning right now.

These are the charts that were meant to follow the first post, named "Important" because I wanted to make sure it stuck out. There are a few sections below in red, meant to standout. Please do not take this as a criticism if you feel like, "He's talking about me", I'm not talking about anyone in specific, I'm talking about a much bigger concept than that, I'm talking about the fact that Wall St. doesn't do anything without a reason (as I gave you an example of earlier).

The reason for moves like today are more emotional than anything, meaning the ultimate move as we have expected and now have data to support, is a much bigger move than today, however the two forces that move the market are quite simply Fear and Greed; if you want to trade you are better off majoring in psychology than economics.

The areas in red below point out that you (all of you) are not part of the flock of sheep, you've made the choice to turn off CNBC, to look at the market with new eyes and see the way the market really operates. You know these moves are strong and at this point have to stronger than ever because they need to change wildly bearish sentiment to wildly bullish sentiment if the set up is going to work, for that to happen, the moves have to be believable and even you, even myself,  sometimes get caught up in second guessing even though we knew this ahead of time and knew to expect it, that's just human behavior and that's why these concepts are so powerful, Wall St. is engaged in psychological warfare. In closing this topic, please don't take anything below in red personal, it's not about anyone I can even think of off the top of my head, it's just an example of how powerful these moves are and how Wall St. always has a reason to do something.

Moving on, I know you have heard it often lately, "I've never seen something like this before", but we are in an extreme market that is a house of cards, built 20 stories high, built on beach sand with shifting winds and an incoming tide (That would be the market's movement based on F_E_D liquidity that is about to be withdrawn). 

The point is, we've never had a market like this in the history of the world, not only so interconnected, not only so many global recessions, but something like 500+ International Central Bank easing actions since 2009, it is truly unprecedented and you can see how it is playing out in Japan already, that's a preview.

OK, this is what I have so far. Please don't forget that in my theory of what would happen in the market posted a week and a half ago last Monday and Tuesday, the triangle in the averages was a head fake pattern set up to draw in shorts, shorts were to be burned causing a squeeze to the upside, the reaspn for the last week and a half of trade was to set up a strong upside move, when I say strong, I mean strong. I often warn ahead of time something like, "This move is going to be so strong you yourself with all of the knowledge you have that others don't, will feel fear"

Even after giving members wanrings of what to expect, even after telling them that this move will be so emotionally strong and challenging, you'll be moved, I STILL GET PANICKED EMAILS FROM MEMBERS WHO THINK THE MOVE WE EXPECTED AND WERE WARNED ABOUT IS A REAL THING AND THEY WANT TO UNDO EVERYTHING WE HAVE DONE TO TAKE ADVANTAGE OF IT.

I'M TELLING YOU NOW, THIS UPSIDE MOVE SHOULD BE ONE OF THE STRONGEST YOU HAVE SEEN, YOU WILL DOUBT ALL SHORT POSITIONS AND LIKELY BE AFRAID TO SHORT ANYTHING, ALTHOUGH THAT IS THE PURPOSE OF THE MOVE.

Just like the move of the last week and a half was to set up a bear trap to push prices higher and we haven't even gotten started yet as far as I can tell, the next move will do the same thing, except it will be drawing in bulls to establish a huge bull trap for a wicked break to the downside.

That is what I have thought since that Monday/Tuesday last week, I have not wavered since then and I am now getting the evidence that supports the theory.

*IF ANY OF THE EVIDENCE CHANGES (and smart money is not always so smart and reserves the right to change their mind) I WILL WARN YOU OF ANY CHANGES.

Now the charts...

Lets start with the Equity Index charts (ES is the S&P E-mini futures,  NQ is the NASDAQ 100/QQQ E-mini Futures, TF is the Russell 2000 E-mini futures.

 ES 1 min intraday, it looks like some profit taking was going on from traders like us who set up our long positions yesterday, in fact I'll show you our rank today and it will give you an idea, along with a sentiment update (Hopefully Sam will send another as far as AFTER the CLOSE) of just how many traders were still very bearish, still very much on the other side of things.

 This is ES on a 15 min chart, this is a serious signal. Note the sort of "U", sort of "V" shaped reversal that we talked about occurring over night yesterday, there it is, but more important, look AT THE SIZE OF THAT 3C LEADING POSITIVE DIVERGENCE COMING FROM THAT AREA AS THERE WAS (AGAIN AS MENTIONED LAST NIGHT)  A HEAD FAKE MOVE BELOW $1600, that's exactly where that accumulation came from and why I said there would be one.

This is the NQ 15 min chart, I haven't ever seen a 15 min futures chart with a leading divergence that strong, that fast and its confirmed in all of the Indexes. In yellow, the typical head fake move before a reversal, the same as Es under $1600 last night.

This is the TF 15 min chart, again, leading positive (the strongest type of divergence) to a new high on the chart and in one of the biggest, strongest, fastest deloping divergence I've ever seen on futures charts, maybe on all charts.

This is 30 min ES, it's strong, not as strong as some of the others.

Note the previous low/positive divergence, it's possible this is one large divergence in which case, the move would be exceptionally strong.

 This is the 30 min NQ chart, that's an insane leading positive divergence to occur so quickly on such a long timeframe, that's serious underlying money flow.

 Look at the 30 min TF divergence, it's leading to a new high!

This is an amazing TF 60 min chart from today, I'm speechless after seeing these.

As for currency and if you haven't read the two articles I wrote in April "Currency Crisis" which are both linked at the top right of the member's page, then you are missing out on a lot of understanding of what is happening, why and what it will lead to.

 This is yesterday's positive divergence in the former carry pair, AUD/JPY, I've talked about how this pair has come to help the market move to the upside all week. This is a chart from yesterday, in fact in this post, yesterday's "Daily Wrap, The Head Fake Is In" you'll see the charts of AUD/JPY as well as EUR/JPY and the references to how we noticed this earlier in the week, there are at least 4 other posts dealing with the AUD/JPY coming to help. Yesterday the accumulation was in...

Today...

 The move was in- 1 min AUD/JPY.

We also had the EUR/JPY

the accumulation of the pair is clear, the move was supportive of the market, but there's distribution in the pair as the afternoon went on, this is why I mentioned maybe taking profits in VXX and AMZN as a pullback may be on the way due to op-ex Friday pin.

The USD/JPY which is the main driver of the market right now...

It didn't matter how bad the Nikkei was torn apart last night, down -6.4% making the Goldman Sachs "Long the Nikkei"  with a target of $14,500 and a stop of $12,700 posted over the weekend, exactly the garbage I said it would be, how about this post, "Goldman Strikes Again" but rest assured, they aren't dumb, they didn't lose money, they were on the other side of that trade making money. The point is, even with the USD/JPY getting Monkey Hammered overnight, it was there when the SPX needed it today.

The same negative intraday was there so I decided to look at the individual Currency futures and found more surprises.

 The $USDX 1 min going negative, no wonder the pair went negative intraday.

The 15 min $USD though is leading positive, this speaks to a longer trend to the upside with USD/JPY help.

Now the Yen...

 The 1 min Yen, when it rises the USD/JPY and market tend to fall so the positive divergence contributed to the 1 min USD/JPY a little.

 This is the 5 min Yen., it has the start of a leading negative divergence, which is good for the USD/JPY and the market. So you can get a feel for what the market will do very near term and next week just by these charts.

Now look at  the Yen 15 min, combine that with the USD 15 min and you have a screaming market next week, maybe sooner.

The 60 min Yen is even worse, but more importantly, a longer term trend, speaking to the size of the move up in the market.

This is the 4 hour Yen, the VERY big picture, note how it is the opposite of the 60 min, if you read the two linked posts, Currency Crisis, you know what this means, this is the trend that the market upside and bull trap are setting up.

More shortly.