Market Update

I have a lot to look at so I just wanted to get one more update out before I go changing all my layouts.

 That early market / 3C weakness that was creeping in is getting worse, you can see above on the intraday 1 min SPY.

The 2 min SPY is seeing migration so the divergence is getting stronger and this chart is looking worse.

The SPY is still holding an "In line" status at 3 min, but I'd expect that as the 2 min is not yet as ugly as the 1 min, when it is or if it goes that way, it will effect the 3. 5 min charts.

As for the Q's, the 1 min there is also more negative, but it's holding an "in line" status at 2 min so far, it hasn't seen migration yet.

The IWM 1 min is worse, like the SPY above, the 2 min is going negative and the 3 min is where the IWM is in line so we do see signs of the divergence getting worse, whether it continues to get worse and upturns this bear flag (or rather does that soon) just depends on the underlying trade.

I truly think that today's 3rd consecutive failure of the PBoC to inject liquidity is spooking the market, it seems clear they are engaged in a tightening policy, for how long? Who knows, but with the housing bubble, the drastic actions of their banks to clear non-performing loans and a 1 week +12% gain in housing in Shanghai, I'd say they have an inflation monster that came from Japan and the US, I'm almost more interested in how they'll retaliate, tightening is one method.

Index futures are almost identical to the averages, the 1 min charts below are negative and the 5 min charts are in line, I'd call that good confirmation of the situation.
 ES / SPX Futures 1 min


NQ / NASDAQ 100 futures 1 min

TF / Russell 2000 futures 1 min, this one looks pretty extreme in how fast and deep that current leading negative divegrence is.