Market Update

So far nothing too exciting, we are making that wider bottom which was my main concern last night.

All of the Index futures are in line intraday.

Market Averages (ETF)

 SPY 2 min looks good, this morning's lateral movement is widening the "U" shape, as mentioned above and in last night's Daily Wrap, this was my main concern, that the "U" shape was too tight, even for a parabolic move.

This is the same 2 min chart, I did mention last night that we could end up with a "U" shape in which case we are proceeding fairly well or possibly a wider "W". There is an argument for and against. The argument for a wider "W" is a wider base has more support or gas in the tank for a reversal on the upside. The argument against is that the majority of the accumulation would already be done last week during the lateral range and a head fake move just clears out stops, lures in shorts and primes the market for a reversal (upside move). Either way, we want to see 3C continue to move higher.

 This is the same chart, just showing this morning's lateral movement and how it contributes to a more stable reversal point. Amazingly if you look at enough of these, the preceding trend and the base or reversal process often are proportional. Usually a top is a wider "U" or "n" and the bottom reversals tend to be tighter.

 Ultimately I'd like to see this 5 min chart really take off to the upside more than it has at this point.

QQQ 1 min, as mentioned yesterday the Q's were higher up in last week's range and it took them longer yesterday to move below it which is at the yellow trendline. I didn't expect any positive divergences until we were below the range, it wouldn't make sense, it would be entering too early. The intraday chart seems to just show the slowing down of the intraday divergence to keep a more sideways price flow.

The 3 min QQQ looks good, no deterioration so the 1 min chart still looks like it's just steering intraday price and not much else right now.

 Again as for the 5 min chart, I'd like to see this lead to the upside more. We've seen 15 and 30 min charts lead in a single day so a 5 min chart can do it when it's ready.

 This might be what the QQQ 5 min would look like with either a "W" shape base in which case the second bottom of the "W" would have a very high probability of taking out stops below yesterday's lows before completing or just a wider "U" shape, but as it carries on sideways (whichever form it choses), I'd like to see that 5 min chart make larger leading highs.

This is the 10 min chart and this comes back to the 2 arguments for and against a wider bottom here. The point again is the relative or even leading positive 10 min divergence, this seems to be because of the majority of accumulation was done last week in the flat range, choppy in the range, but lateral (yellow).

IWM 1 min is like the other averages, although not like Index futures which are in line with price.

The 2 min showing a negative divegrence and the reversal process and a positive leading divegrence and a reversal process. When I say process that is because that's what we see 90% of the time opposed to a reversal event which would be a "V" shaped reversal. Institutional money can't move as fast as we can, they can't put together a position with 1 trade, thus the process takes a little time and if you get use to looking at these patterns, you can get a pretty good idea what to expect based on what came before.

Again the IWM 15 min chart has that same leading positive right now which suggests most of the work was done last week as we saw at the time and as was expected before the range developed when we predicted it the preceding Friday.