Market Update- Connecting the Dots

There are far too many charts to show the big picture and the amount of confirmation, I could probably post 80 charts to make a simple point that I can make using the QQQ as an example, the reason I sometimes include so many charts is it gives you confidence to see the level of confirmation, but it's also a lot of time that can be used watching for changes that are constant in the market, identifying opportunities or dangerous areas.

So once again, here are the Q's as an example, the IWM has great confirmation, the SPY was a little strange this morning as it confirmed the upside gap, but as soon as it did so it started going negative almost immediately.

I think the bottom line would still be on a very short term trading basis and this would be the most dangerous, we should be expecting some downside from here just as we saw yesterday and the pre-market Futures indicated and still do.

The Swing trade (I'll call it for lack of a better term) that represents the market action we have been tracking since we first got whiff off it Jan 24 and it started Jan 27th after the weekend has a large base area, yesterday that size was complimented and confirmed with exceptionally strong positive divergences in the 15, 30, 60 min range, this is a safer trade, but it will have to wait for our first shorter term move above to finish.

The safest, yet perhaps the hardest to sit and wait through is the long term which is out of control negative, this is along Primary trend lines now and I think the actual top or the area that will be identified as the top is already in. This is like anything else, if you are a trend trader, you have to sit through a lot of corrective waves, so while everyone thinks it's the easiest method, it's actually emotionally quite taxing, but probably the safest long term bet. It's up to you to decide what trends you will trade and make sure your trades reflect the trends you have chosen to trade and there's nothing wrong with trading multiple trends as long as you understand multiple trends all exist at once in different stages of their cycle. Honestly, multiple timeframes is the diversification I prefer with the shortest trends using the most leverage like options, mid-level trends using less like 2-3x leveraged ETFs and trend trades using no leverage.

 QQQ 1 min doesn't need any notation, it's clearly negative off the open and in line with yesterday's developments.

The same is true of the 2 min

As well as the 3 min. With these 3 charts in a row we have enough evidence to say the divergence has migrated to longer timeframes and that represents the growth or near term strength of it.

At 5 mins we have a negative and that's why I take it seriously, a 5 min chart is kind of my line in the sand moving past intraday moves.

At 10 mins we have a change in character and a more neutral/positive chart, these were built by shorter term divergences that migrated out to longer timeframes.

The 30 min chart gives this a very strong probability of a very strong move up to come, the base action and divergences through it have given us that evidence but it didn't really exist on one solid long timeframe until now so it is clear.

This would represent my swing type trade. My primary trend remains negative.

4 hour deep leading negative divegrence