Thursday's Wrap... The Gist

Before I go in to the Wrap for Friday or even the week, in case you missed it or forgot, I think this is pretty important to understand, especially as it relates to forward looking analysis. I abbreviated things so they are easy and quick to read.

This was kind of the gist of Thursday and all of this is taken directly from Thursday's Wrap...

-The NASDAQ 100 took out almost 3 weeks of gains (1-day short) in a single day
-RE: The Russell 2000: all of the downside damage which is over 50% of the entire cycle was essentially done in only 2-days.
-RE: ES (The SPX E-Mini Futures: This is more than a 32 point ES drop from just before 8 a.m. this morning to 3:50 this afternoon,  which is the biggest intraday plunge since June. 
I think most people could be forgiven for expecting the market to see another nasty downside day today, but our analysis suggested something totally different short term (as in TODAY)...
Excerpts from yesterday's post and charts linked HERE ______________________________________________
The Gist "I'm thinking  SOME UPSIDE FROM HERE IS HIGHER PROBABILITY"
Transports  The IYT/Transports chart, I think we'll get a bounce we can use to short in to, price alerts for a bounce should be set, the 3C trend is quite clear.
Financials In Financials, our FAZ (3x leveraged short financials) is in the green, these are the short trading positions I didn't want to let go of. I do think you'll get a chance to grab a position here on a pullback
Yesterday's Overall Action I DON'T WANT TO BE TOO QUICK ABOUT CALLING A FINAL TOP, A LOT CAN HAPPEN FAST, BUT I HAVE NO PROBLEM CALLING OUT SEVERE WEAKNESS IN THE MARKET.
Credit " Intraday HYG was a bit stronger at the close, there's a lot of momentum/weakness today, but the funny thing about downtrends and bear markets even is that they tend to have more up days than down days, the down days are just a lot bigger.
So we may get a bounce here as op-ex comes in to play tomorrow, perhaps a higher max pain pin, if so it would be useful in positions like FAZ long on a pullback."

"Junk Credit is NOT used as a manipulative asset like HYG, but is High Yield, it also had a stronger close hinting to me we'll see a bounce, for now I'd say this looks good for a move to the upside allowing some new positions to be entered at better prices and less risk."

Sentiment Indications

"This is one of our two sentiment (pro) indicators. Intraday today it wasn't STRONG for an upside bounce tomorrow, but it was stronger in to the close hinting at some near term upside, which may not move above today's range, but may be useful as a tactical entry/exit.:

"This is our second sentiment indicator showing similar strength (not very strong) in to today's close suggesting at some likely upside tomorrow or very soon."

Short Term Yields

" Intraday yields also pulled up after reverting to the mean short term, this suggests some upside near term"

MCP To See Upside Today

After earnings that weren't initially taken so well...

" 3C was developed on the TOS platform originally for AH readings, in this version MCP makes AH lows in to a 3C positive divergence and ends the session at $4.76, right where it closed during regular hours."

PCLN to See Upside Today...

"PCLN beat on top and bottom (Revenue and Earnings), but failed in the most important aspect of earnings, Guidance and guided lower...

PCLN AH hit some deep lows on a 3C positive divergence, apparently someone accumulated those lows and is sitting on a nice little profit as PCLN closed AH ay $1012, about 10 points below regular hours, but well off the $945 AH print."

Dominant Price/Volume Relationship

"The Dominant Price/Volume Reading tonight among all of the major averages (the components of the averages) was a very dominant (about 50-75% in 1 relationship of 4 possibilities) CLOSE DOWN/VOLUME UP, this is a VERY bearish relationship, BUT SHORT TERM OVER THE COURSE OF A DAY OR SO, IT OFTEN ACTS AS AN OVERSOLD SIGNAL SO A BOUNCE FROM THAT SIGNAL WOULDN'T BE SURPRISING."

Short term 3C Signals

I have positive in the IWM from 1 to 3 mins. While not as consistent among short timeframes, I have intraday positives in the Q's as well and a couple weak ones in the DIA, not so much the SPY so that would be consistent with some of the intraday leading indicators like credit and sentiment, also with the Dominant Price/Volume Relationship and a few other indications.

"I also have 5 min positives in the Index futures so I'm thinking  SOME UPSIDE FROM HERE IS HIGHER PROBABILITY, BUT THE LEVEL OF DAMAGE IN THE MARKET CANNOT BE OVERSTATED. "