Market Update 1 of 2

Before I switch over to the Leading Indicator Layout I wanted to get an update out, the next will be leading indicators.

Basically the same thing as I mentioned in the earlier update is still occurring, 1 min is steering or in line, longer term falling apart.

For example, say each "X" represents a 1 min. time period (and this is the reason the longer time periods are much more important in showing the trend of underlying trade).

3C will move up or down depending on whether there's more money flow at the present bar vs "X" bars ago, if it is more, it moves up, if less it moves down. This is how I was able to improve on Time Segmented Volume as they use a moving average of the raw data, whenever you average data, you lose data. My way doesn't drop any data which is important because a big institutional order can go through in milliseconds, to average it out is to miss out on important data.

So a 1 min 3C block/ bar would look like this "X"

5 min= "XXXXX"

15 min= "XXXXXXXXXXXXXXX" and so on.  For a 1 min bar to move up, there can only be so much accumulation or distribution due to the amount of volume during that period. However as we move to longer periods, the size of the underlying action can be significantly larger.

Today's action is a bit unique and I think because it is op-ex Friday, the 1 min charts are pretty much just steering, while the longer term charts are showing the underlying trade. However the longer term charts or the larger underlying action..

 DIA 5 min leading negative, but pay attention to where the divergence starts to get worse today.

IWM 15 min leading negative, there's strong underlying negative trade in the IWM today

QQQ 5 min

SPY 3 min, again pay attention to where it gets worse intraday.

Now the CONTEXT model vs. ES, this model is treasuries, credit swaps, credit, currencies, carry trades, precious metals, etc. In a perfect world or market, they's trade together because of the high degree of correlation.

The first thing that is notable about CONTEXT is the immediate drop as soon as the 8:30 NFP came out, institutional risk assets were sold hard.

The second thing is if you paid attention to how 3C got worse as the day went on (remember it is op-ex pin Friday), look at how CONTEXT has done the same in the red box.

The distribution signals in the market averages line up with the selling of institutional assets.