Updated Charts...

I've mentioned this a few times, not sure if you've noticed or not, but there tends to be 3 parts to the trading day that can have three totally different trends which is appropriate because there are three trends, Up, down and sideways is a trend.

Usually you have the early a.m. trend, that's where a lot of games are played and a lot of orders are hit because order flow is extra profits, well lets say liquidity is extra profits, so we might see a big gap up in the morning (or down) and like yesterday, a flat trend across the rest of the day where there's really very little movement at all and then a third trend in the late afternoon which is the time the pros usually trade, that's why there's such an emphasis on closing prices and not intraday highs/lows.

In any case, just keep that in mind when you see something crazy in any of the 3 sections, there's likely something else coming so long as you are not looking at closing trade.


I mentioned the SPY which was probably the most stable of the 3C charts yesterday and Monday is seeing more negative deterioration than say the Q's and the IWM is also seeing the same, the Q's have pretty much picked up where they left off yesterday and at last look there wasn't anything too exciting standing out yet, but I figured I'd update a few charts like USD/JPY and then I kept going...

 USD/JPY 1 min from about 10 pm last night (EDT) to present with a negative divegrence at the recent highs this morning, interesting it went negative on the open allowing the market to open near its closing area and has since lost ground.

Last night I mentioned the Yen positive divegrence and said that by the time the overnight session is done, it should be about enough time for the Yen to put in a proportionate reversal process, I drew that in with yellow arrows, that's a pretty mature process in place, look at enough charts and you'll see reversals are not a "V" shaped event, they take some time and they are usually proportionate with the recent trend  and character of trade. Remember a rising Yen and/or falling $USD = a falling USD/JPY and that has meant a falling market.

 The 5 min $USDX shows the positive in place that was responsible for Monday's move or at least played a big role, but this has been going negative since yesterday and continues to do so, this chart starts with Friday at the far left and right up to the present.

Again, the implication between the Yen and $USD are not positive for the carry cross USD/JPY (carry trade) and as such, not positive for the market, although we have decent divergences and reversal processes, we still need to see the $USD drop in price and the Yen rise.

 This is the USD/JPY (red / green price bars) vs. ES (purple line) on a 1 min chart, you can see the correlation has held overnight, there's a little sloppiness in it since the open, but all in all it should stick to the correlation overall.

 I mentioned first thing today that there are a few assets I may be interested in, they just needed a bit more time, not long at all, one would be VIX futures as you can see the 5 min VIX futures are still in leading positive position and there's a pretty mature price reversal process. The thing you want to watch for is the stop run when you have a pretty well defined area of support (or resistance ).

VXX and UVXY also have nice looking charts so I have interest here, but again note the flat bottom, it's something to keep an eye on as it can be useful as an entry and a timing marker, the process is mature and the divergence is leading nicely.

3 min leading VXX/UVXY

5 min leading VXX / UVXY

As for that SPY 5 min chart mentioned, I put a vertical trend line at 4 p.m. yesterday so you can see the continued deterioration in the SPY which is important because it was the most stable yesterday, not so much today.

And the IWM 5 min as mentioned as well, but it doesn't stop there for the IWM...

The 10 min is already adding to its negative intraday this early. Remember the VXX support I had warned about, as you know they tend to trade opposite the market and the IWM has a clear resistance area, that's an invitation for a head fake move, in this case to hit limits, maybe squeeze whatever shorts are left, if that were to happen VXX would see a stop run, I don't know if it happens or not, it doesn't mean a whole lot and it's one of m,y favorite places to enter, but the more defined the level is, the more obvious it is and the more stops or limits that line up there making it more profitable to hit as well as more useful for momentum in a reversal.