Quick Market Update

The intraday positive divergences in the averages have not grown in any way that makes me feel they are any kind of real threat to positions like SRTY , SPXU and FAZ (3x leveraged short SPX, R2K and Financials). In fact the intraday $TICK custom indicator has declined this afternoon.

The one thing from a behavioral standpoint is the look of a bear flag with the gap down and today being the flag, many traders would be setting up shorts, at least short duration traders. This alone makes me think an upside move from the bear flag would be likely as it would knock out any new (timid) shorts.

Other than that, until I get a good look at leading indicators, I'm not too concerned. The only thing I'm really interested in right now is taking a closer look at short term VIX futures (VXX) and VIX futures themselves, they'd be likely to point to any short term upside "noise" I'll call it, just because the negative trends are so clear and defined, this is how people get knocked out of good trades, they focus too myopically on intraday.short term trade and they miss the bigger trend laying right there and essentially get knocked out on noise. I don't want to be in that group.


There's also some interesting movement in HYG (HY Credit), today's lift saw intraday distribution and it already had a negative trend that set in very quickly and deeply last Friday, but it's an asset that is used to push the market around in short term manipulations in concert with others.

I'll have a lot more for you after I update after the close.

As I said though, for now the longer term trading positions established will stay in place. As far as new positions, I don't see this as a high probability window right now, that can change in a matter of hours as you know.