Chart Update

The obvious caveat is that I'm not a fan of analysis based on a.m. trade and it's still VERY early in the day, but a few key things have started to happen.

Currency...

The market needs some kind of support or engine to push it higher at this point, recently that has been one of the carry crosses, most often USD/JPY and sometimes with some SPY Arbitrage mixed in.

 As mentioned in the Futures post, the USD has to strengthen and Yen weaken for the USD/JPY to support market upside.

Above the $USD hits the low of the week and takes off to the upside right at 9:30

The Yen falls from pre-market highs right at 9:30

And suddenly we have nice support in the USD/JPY right at 9:30.

As far as the SPY Arbitrage which isn't necessary, but helpful to the market for an upside move, the 3 assets are TLT, VXX and HYG, the first two need to be lower and HYG higher.

 VXX 1 min seeing the kind of negative divergence I envisioned yesterday and elaborated on in last night's posts. The lower price though is all that is needed for the Arbitrage to work, the 3C signal doesn't matter to the arbitrage itself.

 TLT is maintaining near or below yesterday's close which works fine as long as VXX is down more than HYG. The continued positive divergences in lower TLT (as we expected a TLT pullback and accumulation of it) are part of another trade or add to position as a core long, but we're not there yet.

HYG is positive off the open and above the close so the SPY Arbitrage is now useful to the market making upside head way in a bounce, although we have to remember its still early, but it's looking just like expectations from yesterday as well as the after market analysis.

The market's position...

This was important because staying near the range of the last day gives the averages more time to accumulate, build a larger base from which to stage an upside move from.

SPY right in the range, but also in an area in which a number of bullish daily reversal candles could develop such as a star or bullish engulfing candle, Tweezer bottom in some cases.

Precious metals...

Obviously I want to be extra careful about drawing early conclusions from the PM's, but this is certainly a possibility.

 The range in silver and gold has been very obvious, these kind of flat ranges are where we most often see the greatest amount of underlying trade activity even though they seem exceptionally dull, one thing they are is VERY steady near the VWAP.

The head fake move is one of the last things we see in most reversals and in all timeframes, just as long as there's an obvious range to trigger limits/stops, SLV looks like it opened with a possible head fake move and obviously 3C is supporting that in early trade.

The same thing for GLD.

IWM...

I've had to go back and recapture this and other charts in some cases 3 and 4 times since the last post as they are moving that quickly.

The price range in the market/IWM is important as was mentioned many times yesterday, but also that the divergences grow stronger and continue to confirm each other, right now the main challenge they face is growing strong enough so they aren't run over by any downside market panic.

GOOG

I mentioned GOOG as an interesting potential hitch-hiker long play yesterday, it still needed and needs more work, but it continues to develop well.

GOOG 2 min

There are many other charts like XLF and XLK showing some early underlying 3C support, I do caution it is still considered early as a.m. trade is often deceptive, it is a monthly options expiration day as well, but these are some of the things popping up so far and many are right along the lines of the broader futures analysis posted last night.