A.M. Update

This is a continuation of the last post, all of these charts were captured before I published the last post as they were meant for it, but I thought the market may move a bit too fast to include them and still get the information out for those using options.

Beyond the general concept of last night's post, as you know a.m. trade is deceptive for analysis because it's a lot of game playing, stop runs, limit triggers etc. It will be interesting to see how retail sentiment acts today, I'm guessing it's going to start to be less bearish and start to move toward indecision.

As for the pre-market moves in "Syria-senitive" areas such as the big moves pre-market and in to the open in Gold, Silver and Crude, we also had positive divergences in the Index futures as seen in the Pre-Market post with the ES (SPX Futures) and its positive divergence intraday, the NASDAQ and Russell 2000 futures had the same so the apparent catalyst is McCain's remarks about not backing the Senate Draft Resolution backing a Syrian Strike. As some of you may know, some of the most successful traders are in fact, Congressional Staffers, I'm sure you can guess why and don't think Goldman doesn't have their tentacles in the Congressional offices via staffers.

In any case the parabolic market move up and war sensitive move down at first "seems" to be because McCain is not backing the draft, it sounds like he's a dove, but if you saw him and Lindsey Grahm over the holiday weekend, you know the truth is in fact just the opposite, they are looking for MORE, not less.

There's two issues I think "could" be in play, one would be the knee jerk reaction as most would think to McCain's statement, the second would be, "LETS GET THIS BOUNCE MOVING BECAUSE THERE'S A WINDOW AND THE UNCERTAINTY THAT IS GOING TO BE COMING DOWN THE ROAD IS GOING TO BE WORSE FOR THE MARKET THAN ORIGINALLY ANTICIPATED WITH A SURGICAL 2-DAY STRIKE", which now seems to be a moot point. There's a lot of politics here that I think are exactly the opposite of what is being said in some of the highest corners of government, but we're not about politics, we're about listening to the market.

For now, lets get back to the charts that were captured BEFORE the last post suggesting the parabolic open was going to lose steam, thus for options traders, it's important to take that gain on momentum if you are playing them in and out. As you can see, the momentum has faded and War sensitive assets are consolidating.

The charts...

 The first 3 charts are the Index Futures, make sure to look at the time scale in EDT, this is ES (SPX Futures) and pre-market they had a positive divergence suggesting a pop on the open, so the opening pop up shouldn't be a surprise, but it's also a transitory, intraday move and it doesn't negate last night's post looking for perhaps one more run toward the local range lows for more accumulation, perhaps a head fake break below local support before the market really moves to the upside on what I've been calling a , "Bounce", but in fact I'd expect it to be quite a bit stronger than what we normally associate with a bounce.

 The NASDAQ 100 Futures also had a positive divergence going in to the open.

 As did the Russell 2000 Futures.

Now as far as why I thought the move would lose some momentum, VXX and UVXY as well as VIX Futures were showing positive divergences on their 3C charts, which should move opposite the market.

 After the open you can see clearly on the QQQ 1 min 3C chart that the opening move was starting to see a negative 3C divergence (light distribution) which was likely to slow the move and/or reverse it depending on what the 2 min chart does. At the time the 2 min charts didn't have enough time to catch up as it was early, but the  2 min charts now are all negative which makes it high probability we see an intraday pullback from here.

*This is an example of a CURRENT 2 min chart (vs these charts that were captured before I posted the initial warning).

This is a 2 min IWM chart that shows the strong accumulation yesterday centered around the 2 p.m. hour and the move up from there as talked about last night right in to SPX futures' VWAP.

The point being (for this morning), a 1 min divergence as you know is a 50/50 chance that we'll either see a correction through time (consolidation) or a correction through price (pullback). When we have the 2 min chart negative as well the probabilities drastically shift toward a correction via pullback which is what I was talking about last night.

Back to this morning's charts...

 The 1 min IWM was going negative as you can see

The DIA was in fact one of the strongest intraday underlying 3C charts, the 1 min is STILL in line with price, however the 2 min is not confirming so I'd expect the DIA to pullback as well.

 This is the SPY 3 min chart's leading positive divergence from yesterday's mid-afternoon accumulation which is very strong and remains so, this is excellent for our bounce, it's not great for intraday timing. However, right now price is almost perfectly in line with what was a leading positive divergence so price moved to the divergence and now it is more likely that it will start to consolidate and roll over at some point, this of course still being based on a.m. trade.

 The VIX futures started showing a more positive tone earlier just after the opening run and that's not the best for the market (speaking on an intraday basis).

The custom Indicator for NYSE TICK is showing a slight deterioration this morning.

This is the current TICK chart.

The channel I drew around TICK data (number of advancing NYSE issues less number of declining NYSE issues) is in an uptrend as it should be for the price move, but note how it's no longer hitting the top of the channel. A break below the channel will come with an intraday reversal to the downside with price.

3C is suggesting this, TICK is, Futures are, VIX is as well. This is not bad at all for our bounce, in fact if it follows the path I laid out last night it will make it a much stronger move and give us plenty of opportunities to add to or start new positions to hitch-hike on the move, of course it's still the big picture of shorting in to strength that is the real prize.