Market Update, SPY Follow Up

Since this morning's momo/biotech sell-off, it has looked like we'd see a trend reversal, there are 3 trends, up, down and sideways and we transitioned from down to sideways, that's typical of short term accumulation and we have that in place as well so it looks like another transition to up is on the way, don't panic, this isn't up as it anything beyond a shakeout as so many clear levels of support were broken today, Retail traders live by confirmation, they won't usually enter anything without price confirmation and being price is so deceiving and misleading, they are often entering at the exact wrong place right in the middle of a bull or bear trap and this is just because they adhere to principals that are over a century old, they are predictable and they are easy marks.

I chose the SPY for a weekly option which is a VERY short duration position for me as you might know, I usually like to have at least 2-3x more time than I think I need, that should tell you something about my views on a counter trend bounce, VERY WEAK and the only way I see there being enough leverage to make it worthwhile is to use weeklies and that also tells you something about my expectations for the duration of a counter trend bounce, VERY SHORT TERM.

Note the large difference between the SPY charts and the QQQ/IWM, you'll understand why I chose the SPY, even though IWM has been one of my favorite targets.

 SPY 1 min, note the lateral trend today we expected this morning as the market was selling off.

Lateral trends are also where we find a lot of underlying action like the small term accumulation intraday for a bounce.

This 2 min SPY leading positive is what made up my mind, the SPY Call is in no way a hedge or protection, it's simply to add some gains.

"IF" it pulls back to the low end of the white box or below and the divergence improves, I'll add a bit more to the SPY weekly call.

At 3 mins we are going nowhere fast, maybe it joins, but for now this smells like a corrective move to shakeout new retail shorts entering trades today on breaks through obvious support levels.

The Q's don't look anything like the SPY, if they move it will be because the SPY dragged them higher.

The IWM 1 min looks a little better, still not on the level of the SPY.

The 2 min IWM has seen no migration other than reversion to the mean with 3C, it has work to do before I'd even consider a weekly call.