Market Update, the 2 P.M. Tide Change

As usual on Fridays with either monthly or weekly option expiration Max Pain pins, the 2 p.m. hour is around the time that the pin is lifted as a majority of contracts are closed by then and the market starts to move differently as far as price, but it has always been the last 2 hours of 3C movement that have meant the most nessecarily pick up where it left off the next trading day, especiially over a wekend, but 3C signals almost always pick up where they left off even over a weekend, so that tends to be the important thing for us to watch.

AS YOU KNOW, I DON'T ENDORSE CHASING PRICE, we usually make position changes in directional changes at pivot points, often buying in to the lows and/or selling/short selling in to the highs as long as 3C agrees. So today I've been doing a lot of house cleaning and adding a few positions, but mostly protecting gains in time sensitive assets like options that expereince time decay. I think you'll notice that I have not entered many longs, in fact thus far just added to the short term QQQ call position so that should tell you something about what I'm expecting moving forward very near term and it should also tell you that the fact I'm NOT entering more longs or in greater size is a reflection of where I think the probabilities stand and how much risk there is in entering longs with the market so damaged. I may enter a few more or clean up a few positions depending on what 3C says, but most positions will be dealt with now rather than chasing price once it's too late and taking on way too much risk.

The SPY looks like this which is what was expected this week and very specifically yesterday from the signals and Leading indicators as well as the carry trades.

 That "W"-ish pattern or consolidation with 33C positive divergences tells me to expect some near term upside, however it's not so strong that I'm willing to take on much long exposure.

The charts in all of the averages have continued what they started yesterday, here's another SPY chart that could be a proxy for any of the market averages.

You can see the accumulation at the lows of this small, tight range.

I think we are very near and as such I'll probably continue looking at existing positions that are time sensitive in an attempt to protect gains and in select circumstances, maybe enter some short term long positions to take advantage of what looks like a clear stage 1 / accumulation base, although please keep in mind its size, it's not that big, but as always, WALL STREET NEVER SETS UP A CYCLE FOR NO REASON, THERE'S SOME REASON IT'S THERE.  I think part of it is the same as last Friday, the VIX futures need to drop to be accumulated short term as the long term looks fantastic and that should be the specific primary trend pivot with the market making a significant downside move.

A bounce here (if you are not playing it long) should be used to enter shorts or close longs in to price strength/3C weakness.

TO BE CLEAR, this is the best looking base we've had all week as they have been very weak and showing more distribution than anything, however it's really best used as a tactical entry for shorts on a move higher, IT IS NOT A CONCERN FOR ME IN ANY WAY FOR EXISTING SHORT POSITIONS, MANY OF WHICH ARE ALREADY AT DECENT GAINS.