Early Update, Bounce is still on...

Yesterday I posted one of the averages where you could see a small, poorly defined H&S top and I explained the 3 places I'd short such a move, but I would not chase a break below support, the chart looked something like this.

 I'd either short a head, a right shoulder or my favorite is after a break below support when retail starts chasing it, to wait for the almost inevitable bounce above former support (now resistance) to shake out shorts, this is usually a great price entry and timing wise you couldn't ask for better, it's just not as reliable as some other plays, but I'd say 70-75% of the time we get some form of shakeout, this dovetails perfectly with the expected bounce that's seen in Index futures now on 30 min charts.


The SPY was one of the first last week to start shaping up, the NASDAQ was one of the last, Financials looked better than Tech and that's what we've seen in relative performance.

The SPY looks very close to having a workable bottom to bounce off, the only problem is the NASDAQ and IWM are lagging, the DIA is a little behind, but not as bad. I'd expect they'll catch up, that's why I didn't expect much in the form of a bounce for yesterday unless it was very late day after a constructive day which we didn't have for the most part, except the SPY.

 SPY 1 min leading positive

1 min close up intraday

2 and 3 min are both leading positive

The 5 min has a workable positive divergence/base forming

And now the 15 min is starting to pull together.

Basically we need the Q's and IWM to catch up and it would be nice to see the $USD catch a bid and some JPY weakness.

From what I see in the SPY, I don't think the market will back out of this bounce, it's another market gift to be used as such and as I said before, "We aren't close to the Big Picture, We're in it now".