Market Update

This has thus far been one strange morning. For the most part, the end of day negative divergences from yesterday pointed out last night did what they usually would do and that was to cause some early weakness, the second and more important part of the question was whether they were the start of a larger negative that would migrate through longer timeframes.

In one case this seems to be true, in another the 1 min is simply getting worse and another is a different story, the bottom line is the market synchronicity of yesterday that I commented on with similar averages putting in nearly identical gains, doesn't seem to be the same tone thus far this morning and certainly not in price.

There are no smoking guns...

But there are a few developments that are noteworthy.

 One of the smoking guns that should show up is a dramatic divergence in VXX Short term VIX futures. As mentioned last night, the "process" is in place, the divergence itself "could" pop up in a matter of a few hours and so far, while it's not screaming, the positive here is stronger than it was yesterday (that would be a slightly negative signal for the market's short duration bounce which about half the market is in to the second day of.

 The Q's show that migration of a new divergence I talked about last night as we can see this morning's intraday highs were negative instead of in line.

The IWM hasn't migrated, but the 1 min negative has grown stronger.

 The TICK was very mellow yesterday until 2:45 when ES broke under VWAP for the first time not only in regular hours, but the previous overnight session as well.

This morning we have a couple more extremes around the -1300 area.


Also, this is important to me, I usually have short term trades aligned with the signals on the 5 min index futures which were positive Monday, sent the market up yesterday and went neutral and as suspected last night, are now negative today.

Normally I'd be preparing trading shorts here, it's really the VIX I'm waiting on at minimum.

Otherwise, each asset has to be taken on its own, just the same way the market averages are dispersed between at a loss or at a gain, VERY DIFFERENT TONE than yesterday. 

Still missing the smoking gun, however it can pop up very quickly from where we are, that's part of the reason I didn't want to risk the SLV Put gains.