IWM / Market Update

This is an example of what I mentioned earlier, a "V" shape reversal. Remember tomorrow is an op-ex Friday (yes, even the weeklies get pinned). 

The best way I can describe what this looks like is a bottle rocket getting ready to go off, a sharp move up a little pop and falls back to earth and op-ex may intensify the need for that process.

What we'd want to do is to look for the bottle rocket to go off and pop and then see if there are decent shorts that also moved up with the kind of negatives the IWM has, that would give us a great entry (equity or puts) and a high probability move lower which also gives us a better price, less risk and better timing.

See my comments from this morning's 11:17 market update...

 This is the sharp 1 min positive I mentioned in the market update referenced above, it looks like a quick effort to fill the gap, not a quality effort, that takes time.

The little Inverse H&S or whatever it is is in place, it's the process that is important, but it's really small thus far and I think my description of the bottle rocket is appropriate.

The 2 min IWM chart has NO positives at all, meaning the divegrence we see above is not as strong as it looks, this leading negative makes a move higher worth seriously looking in to shorting.

Of course if the 3 min is negative, the institutional 5 min is not going to be touched and it is in bad leading negative position.

As for the Yen, the 1 min chart shows some loss of momentum, but everything after that is holding together fine, it's what I'd expect to see (confirmation).

The USD/JPY since the start of the year in a downtrend which WAS NOT BROKEN ABOVE $104.91, means this break of $104 today is likely going to see some volatility, but the end result should be the next lower low.

This is why I have been saying, we're already on the right side of the top, it's not apparent in the market and as I had said at the time, Wall St. isn't going to send up a flare and tell you a top is here, but the carry trades betray what they are doing.

Look at past tops, 1929, 2000, 2007, they are at the end, sharp reversals, not big rounding tops, at least they aren't when they happen, only in retrospect, but it's too late to make money looking back in retrospect.