Market Update

After this I'm going to start looking for some positions that I had a gut feeling we might get a second chance (SCBO=Second Chance Buying Opportunity) as I said in last night's "The Week Ahead" post,

"Hopefully if you didn't have a chance to make some moves Friday we'll get a little breather tomorrow and find some positions we can add, but Friday was busy for a reason, I'll leave it to you to judge whether you think the President of the United States makes a decision that big in just a few hours (after the market closed)."

If there is ANY discounting of risk today (I kind of doubt it, although I can't say for sure, I think this is more about traders who were gone Friday and yesterday -pros- creating an opportunity to get long at lower prices ), but if there is any discounting of risk today, my gut feeling over the weekend was "There's so much coverage of Syria this weekend, it could cause a little spook short term or knee jerk, but traders will come back to the realization that there's likely about 10-days before anything is probable to happen and that's not even sure". So again, I had a gut feeling we'd have a knee jerk pullback as I mentioned above in last night's post, but as usual with knee jerk reactions, sense starts to creep in and the market says, "Hey, we have at least a week and a half to run amuck!".

I got off point, which was if there's any additional discounting of risk it's that the US has an aircraft carrier moving in to the region, while it seems pretty clear the President doesn't or didn't want to do anything with live pilots or boots on the ground, that aircraft carrier creates some uncertainty as to why it's there for a Tomahawk strike. In my view, it's a show of force to Russian naval ships in the area, it's a contingency if things were to get out of hand and it's a contingency "IF" Congress says "OK, but we want more, not less".

As far as the market, I'm glad to see HYG still moving in to a positive position, it looks clear it was knocked down today to accumulate at lower prices and the aircraft carrier could have been the "cover" they needed to do that.

Here's what the market is looking like, I'm not feeling any great urgency as far as missing an upside move, but the IWM is leading as it should and looking better and better, also as mentioned earlier this morning, the TICK data has done what was expected and this trend in TICK data is very important for timing.

 XLF clearly shows why I was so busy Friday with a major change of character very quickly on a normally quiet day, you can also see the improvement and turn toward the positive for today since the a.m. gap pullback.

XLK, the Tech Sector 5 min is showing no damage, also the recent unusual strength (we had positives, these just flew in quickly late last week/Friday).

 ES intraday (S&P E-Mini Futures) are going positive.

IWM was the first to go positive and it keeps doing so, apparently retail short selling that creates supply is being soaked up by smart money, this is great for anyone who wants a long position who didn't have a chance Friday and I'll be looking at those next as we are getting closer to the point in which timing is starting to look more ideal.

 The unusual strength Friday in IWM and the 2 min migration today improving as well.

Remember last week the 1 and 2 min charts were moving at a predictable pace and out of no where 5 min plus charts started going negative very quickly.

IWM 5 min with relative and leading positives.

IWM 15 min, this is what's important, the 16th of August is the date we see everywhere, it's an ugly "W" base, but the more times it sucks up supply at the base, the stronger it becomes.

QQQ intraday with Friday's unusual positive at the large white arrow, distribution from retail on the gap open today and positive divergences coming in .

 The same features, plus migration of today's positive to the next timeframe intraday -2 min

 QQQ 5 min overall looking fine, I'd like to see migration there too, but it's not needed as it's already in leading position.

The SPY seems to be the laggard today, we saw that last week too with the IWM leading and SPX and Dow lagging, it's odd to see such broken correlation because it's definitely not healthy sector rotation.

SPY 5 min positive Friday, the 2 min has not seen migration yet, but I just looked again as it takes some time to capture and load these charts and now this timeframe is in line so that's improvement and the 1 min is improving.

3 min is in line, it really didn't see that much damage from the early gap opening fade.

The TICK as I mentioned earlier "Would probably move in and out of the channel several times", but now it's time to start watching for a new channel/trend to develop here.