Early Update

So far so Normal which isn't what you'd normally think for the day after a day like yesterday, but believe it or not, even in a full blown bear market you get just about as many up days as down days, the quality of those days is the only thing different.

In any case, I'm using the QQQ intraday chart as an opening example, it's the cleanest, but they're all on the level.

 QQQ intraday 1 min in line (green arrow) with the downtrend yesterday, a late afternoon small positive divegrence (white) and this morning confirmation (green arrow).

If the Q's (market in general) pull back toward yesterday's lows or maybe even a bit below, then you know what we have, the makings of a small base and the market will likely try to retrace a bit of yesterday, however as mentioned last week, last night, etc... on the right side of the slope, volatility gets extreme, Wall Street is never going to let you think you know what is happening unless it's advantageous to them or like yesterday, unless there's a panic so don't be surprised if they really shake the tree. This is exactly why we want to determine character as quickly as possible, whether they've lost control like 2008 or the AAPL situation (even the 2011 example) or whether they and more importantly, the Bank of Japan can hold it together because right now, the BOJ is likely running around with maximum efficiency trying to knock down for the Yen and support USD/JPY (probably shooting for $104), but seemingly $103 was the line in the sand yesterday. The $100 level will be a real fight.

SPY Arbitrage is actually about $.90 rich, part of this is HYG has maintained, there was damage yesterday as I noted...

 HY Corp. Credit and...

VXX which looks to be in good shape thus far, TLT is helping out a bit as well and I think it will help more, but most of the $.90 is on the SPY's downside and separation from the model.

TLT 3 min leading negative divegrence I showed yesterday, you may recall the 5 min chart was in line though. The 30 year treasury futures have a solid negative divegrence.

30 year Treasury Futures 5 min 3C chart.

So it's likely we see some pullback in TLT which is great for positioning there if you are interested.

TBT the 2x leveraged inverse or TLT short could be a quick trade, if it pulls back like the Q's example I mentioned above, then it will likely make for a quick long trade. If it pulls back and breaks support, but we confirm positive divergences, then you might even consider a TLT call position, but again, very short duration and I'd say very speculative.

I think the two best things working to stabilize the market for the moment are the SPY Arbitrage (HYG, up, TLT and VXX down) and of course the BOJ fighting tooth and nail to knock the Yen down. Speaking of which, the Yen doesn't look bad at all. If the BOJ can continue lifting USD/JPY and EUR/JPY that also helps the market near term, but as the Yen falls, it becomes very attractive to cover those carry trades and I don't know if the BOJ can keep up, let me rephrase that, yesterday they were on vacation for the most part, but still I doubt they can hold back several years of carry all trying to squeeze through the door at once, it will be interesting to hear what comes out of the BOJ the next few days.