Market Update

I wasn't going to originally start this post with the market averages, but since there's been some movement since the last market update, I figured I'd start with the averages first.

 Here are the positive divergences in SPY from yesterday, remember Monday night and early hours Tuesday morning it was clear to us that the market would be heading toward the lower end of the range, the reason for that is generally to accumulate at the best prices with the least risk and the move lower creates supply (which large institutional orders need to be filled without moving the market against their position) as stops get hit and traders throw in the towel.

Of note is the resolution of the earlier "non-confirmation signal" as we see 3C made a higher high with price, confirming the market which is good,

Since then, there's a clear intraday divergence (leading negative), whether a gap fill, a move to the bottom of the range, a head fake move or just a slight pullback, it should create opportunities for trading positions; longer term trading opportunities will be created on a market move above this week's trading range.

 We see migration of the divergence and confirmation in the 2 min chart. The divergence looks intraday in scope and does not look like the kind of signal that denotes possible failure of the range.

 QQQ 1 min also gives a similar negative divegrence, note how the divegrence develops as they sell in to strength, not with weakness. 

There appeared to be a small positive divegrence forming, but even so, it is still within the confines of the larger leading negative position of 3C.

 QQQ 2 min shows yesterday's accumulation at the bottom of the range, just as we saw in the SPY which is good confirmation. This morning 3C and price are in line until the 2 min goes leading negative at the intraday highs.

 Even the 5 min QQQ has a smaller leading negative divegrence, although I think the more important signal on the chart is the larger positive divergences at the lowest end of the range yesterday.

 This is a larger trend view of the same 5 min chart; (from left to right) we have a leading negative sending prices lower and Friday the initial movement that hinted at a range forming this week as posted Friday, Sunday and ever since. In Yellow we have the range and above that in white we have the leading positive divegrence that suggests the range (already a probable base just by the price pattern, although Technical Analysis would teach the opposite) is a small base to launch a bounce higher (also expected this week),

IWM 1 min showing the same accumulation yesterday, sending the market higher with 3C confirmation (green arrow) and now a leading negative divegrence.

 IWM 2 min with the same concept, the move lower Wednesday that is accumulated and this morning's move has 3C confirmation which has turned negative implying a price pullback.

IWM 3 min shows the larger trend since pre-range with multiple leading negative divergences, accumulation of the range area and a signal currently, consistent with a pullback within the range or perhaps a head fake, but it does not imply os support the failure of the range.

 ES / SPX Futures (E-mini) 1 min has the same type of leading negative divegrence, very sharp , however since then 3C has recovered a bit and moved to approximately the same level.

We'll have to wait on another signal to get the probabilities of an intraday pullback.

 There are smaller negative signals in TF and NQ, both of which have moved to an inline status so the earlier concerns of a lack of confirmation seem to be dealt with. As of right now, TF's 3C location is now at a new intraday high, just above the divergence.

NQ is similar with some recent 3C positive activity, not as positive as TF 1 min.

ES's 5 min chart shows 3C/price are in confirmation now, yesterday's pullback is clear as part of forming the range which is not a coincidental price pattern, not when you can predict what it will do in advance because you know what it needs to do to create that range. THINKING LIKE A CROOK!

  The 1 min Yen  went negative yesterday as mentioned last night,  then we had in line status or 3C/price trend confirmation. Currently the lateral move in the Yen from a downtrend is seeing some small positive divergences suggesting a small move to the upside, which is in line with the earlier negative divergences in the market (intraday).

 The $USD intraday 1 min is also leading negative intraday which suggests a downside move coming, especially with a lateral trading range developing after an uptrend - the exact opposite of the Yen, which is good confirmation. There has been a very slight positive improvement in this negative divegrence (the divegrence is still negative, but there is a small improvement, whether it is transitory or not will depend on what develops after, for now we don't have any evidence that it is transitory).

 $USD 5 min is still in line, this means the USD/JPY is still likely to move higher (short term probabilities) which supports the Index futures and the market averages.

 VIX Futures 1 min have a slight positive divergence, usually this would suggest a market pullback is likely as protection against pone is being accumulated. Since this capture this chart has deteriorated slightly with the Index charts and averages seeing slight improvement, but not so much that these charts should be cancelled.

The 5 min chart of VIX futures has seen some improvement as well, but is still in negative position which to me suggest the likely trend of the market remains to the upside as we would expect to see some money flow out of safety assets and in to risk.

AS YOU CAN PROBABLY TELL, THERE HAS BEEN A RESOLUTION TO SOME EARLIER SIGNALS THAT WERE SOMEWHAT PROBLEMATIC ON A VERY SHORT TERM. 

ALSO THE NEGATIVE DIVERGENCES SUGGESTING AN INTRADAY PULLBACK HAVE SEEN SOME IMPROVEMENT, BUT THIS IS HAPPENING SO QUICKLY YHAT BY THE TI,ME I CAPTURE AND POST THE CHART, THERE'S A CHANGE.

THERE'S CERTAINLY NOTHING BIG STANDING OUT EXCEPT THIS WEEK'S OVERALL POSITIVE MARKET TREND IN 3C WHILE PRICE HAS RANGED.