Market Update

I don't intend at present to take any further actions beyond the short term calls and puts already in place unless something is screaming.

I went through the watchlist and will provide you with some of the symbols that have either short term interest or any short term move that will lead to longer term or "Big picture" interest.

The general feel is that of a divergence that is too young and needs more time to base, but the averages did do what I had hoped to see today as far as building out that base, that is to pullback and now they are starting to show positive divergences in to that pullback.

The Index futures continue to make the best argument for a bounce, the averages make the best argument for using the bounce to sell short in to price strength.

My initial feelings about what I see on the charts alone re: the F_O_M_C minutes to be released in under an hour is the knee-jerk reaction is a poor reaction in price, followed by a stronger reaction to the upside, perhaps our bounce.

There are a few reasons I say this, 1) the divergences as I said are immature, this may be the market changing character or it may be my theory above.

2) The movement in 3C on the $USD and Yen charts suggests the USD/JPY pulls back soon, starting almost now, but then sees a stronger upside move.

Also the HYG credit chart is not losing strength, but gaining on the pullback, a further pullback on initial knee-jerk weakness will likely set up quick long trades.

This is the working theory based on the charts, I provide all the charts to back up my reasoning.

The averages... I said I thought they needed to pullback and create a bigger base footprint to support any reasonable bounce and in to the pullback we'd need to see some accumulation of lower prices.

 The IWM is not showing anything intraday, but the 15 min positive is still in place

QQQ 3 min pulled back in to a positive intraday divergence.

 As did the QQQ 5 min which is even stronger.

The SPY 2 min did the same thing

As did the SPY 10 min

The 15 min remains in place leading positive.

Index Futures...
There are longer divergences in each of these except ES, but I chose the best depiction of the situation.

 ES 60 min shows a clear trend in a flat range of a leading positive divergence, a head fake move below the range on an initial knee-jerk reaction would likely set up some decent long plays, but very short term and speculative.

 NQ/NASDAQ Futures 15 min with a great flat range and leading positive divergence, I don't think these are coincidental at all.

TF/Russell 2000 futures 15 min are choppy, but leading positive.

Look at the NYSE Tick's intraday character over the last few days, from very negative to very positive to fairly positive today considering a pullback.

HYG 2 min intraday is showing accumulation in to its pullback.

The 10 min HYG chart is leading as are longer timeframes.

This is where I get the possible timing of bad initial reaction followed by larger upside bounce.

The $USD 1 min is turning negative intraday, this is not good for the USD/JPY pair and thus the market

 The $USD 5 min suggests we should expect early downside in the $USD

 However, the 15 min $USD is positive and flying, this is the larger picture and highest longer term probability over a day or so.

The Yen 1 min is confirming $USD 1 min weakness with strength, suggesting the USD/JPY pulls back and taking the market with it.

The 5 min is in line so it's not positive or going to be much trouble, it's up to the $USD to bring back the strength from the 15 min chart.

Yen 15 min is negative confirming the $USD 15 min.

This would mean the USD/JPY which would push the market higher on a move higher pulls back right in to the release of the minutes, likely a little longer based on 5 min charts (the knee-jerk reaction), and then the 15 min charts kick in pushing the USD/JPY higher, allowing the market averages and HYG, etc to dip lower and accumulate more, filling out the divergences.

This is what I'd expect if the market character hasn't significantly changed.