Important Market Update

After the A.m. Brief which led to a question answered in the last post and given the nature of a lot of the intraday trade, like the very trend-less NYSE TICK data, yet it's rather extreme for having no trend at -1400 / +1000 so far today, it's important for me to get a grasp on whether there is something in underlying trade or other areas of the market that are in essence, the smoking gun ("To make money in the market you have to see what the crowd missed")

Among the averages themselves, there's not a very clear path, although I'm leaning toward better relative underlying  strength in the SPY as opposed to the IWM or QQQ and as you know, the SPX and DOW haven't been great performers on a relative basis. Here's what I have and don't miss futures at the bottom which once again lean strongly toward the SPX.

 DIA 3 min leading negative on the knee-jerk reversal and a mediocre positive divergence.

 When you have noise or a trend is not clear, the longer 3C charts tend to have less detail, but a cleaner trend, the DIA on a slightly longer 5 min chart, still not a smoking gun, but a cleaner trend. Then things get a little sloppy.

IWM 15 min to me looks a lot like a big head fake set up with a bullish ascending triangle that traders are looking for to break out on the upside, yet a 3C leading negative divergence.

However, when you think about expectations, what this move was suppose to do and the 5 min chart of the DIA above, this may be showing us exactly what will happen.

Lets assume some good news on the debt ceiling / budget or at least something that takes the market's uncertainty away briefly, we can have both the head fake move above the triangle that gets us the upside move we were expecting to enter specific shorts , I keep using PCLN as an example because it was at resistance and the place we want to look at it is above resistance, it's there now.

If this 15 min chart stays true, we can still have the breakout move or the same effect for individual stocks and have that followed by the fulfillment of the head fake move. The IWM has to breakout to the upside to even have a head fake move. Once we have our additional shorts in place, if the market drops on a head fake like the one seen above, it's not only a market gift, but it's showing us the order of events and events exactly as we'd have them and there all right there in a simple head fake concept.

Intraday a lot of charts look like the TICK, trendless, but that doesn't mean something is not happening.

Take a look at the same intraday chart zoomed out to see the entire Ascending Triangle, it does look like a head fake move is set up here, but we need the upside break out (the small move up we were expecting early in the week) to complete the head fake move and a downside/ STRONG reversal.

This chart is making a lot of sense.

QQQ 1 min, again, intraday nothing too exciting.

SPY 15 min suggest the upside move, but it hasn't been strong, this has been the case all week and I point it out multiple times each day. I think this probably goes back to the previous post, there's some accumulation in here, but this is not all about the reversal process, a lot of it is about the "Wait and see" process because they literally can't know how to discount an event they can't predict.

What would happen next if the 15 min chart broke out? The hourly gives us a clue, a leading negative divergence, the order of events are the same as the 15 min IWM head fake, up and down.

SPY 1 min, as I said before, not much to go on.

However the SPY 3 min is interesting, it's a stronger timeframe than 1 min and would be more accumulation than just intraday moves with a divergence like this.

Now come back to this morning's ES/SPX Futures 30 min chart...

This chart tells us the same thing about the week, the range or whatever price pattern you want to call it has "Cautious" accumulation, but it's spread over a longer period because of the wait and see, if it were consolidated in to 1 or 2 days, it would be strong, but it's diluted among the week as there's a holding pattern.

The important concept here just might be my experience that "ONCE WALL STREET HAS STARTED / INVESTED IN A CYCLE, THEY RARELY LET IT FAIL".

Now look at the ES 15 min chart, new divergences start on earlier timeframes, it appears something has changed and now there's more of a willingness to take some risk to get this move going.

As far as positions, for most shorts they'd be most ideal on a move to the upside. As far as longs, I'm still of the opinion that we need more than probabilities, we need high probabilities and low risk entries. We'll see what we can find, but I'm not done confirm,ing analysis either.