Market Update

I'm probably going to be a little quiet with posts and emails for the next hour or so, I have a lot of charts to look at.

Here's where we are with the market, and I know we have been talking about a "W" base and that's still a good probability, however the market is the most dynamic organism (I consider it an organism as it's a collective of millions of emotions) I think I've ever seen so we don't want to get hung up on theories, we want to have an idea based on evidence and see if that is confirming based on evidence and as of right now (which is still early in the day as far as the ability to effect another trend intraday) we are very transitional and a lot of that has to do with relative performance between the averages as the SPY and DOW have been in stage 3 while the IWM and Q's have broken clearly to stage 4 and even have lower highs/lower lows so what is a "W" in the IWM is not in the SPY, but relative performance rotates from average to average so we may see the IWM start holding up better as the SPY/DIA catch down to it.

This is one of the reasons I want to look closer at Carry trade and FX performance and signals and especially leading indicators. As I think has been pretty clear with the gains in yesterday's calls closed out and today's puts closed out, we need to be patient and wait for the set up and then use the right tool for the job, I don't particularly like options to be honest, I'd rather swing or trend trade, but if we didn't use options or some kind of leverage, I'd have a hard time saying, "This trade has enough profit potential in such a short duration to take the risk".

As for the charts...

QQQ

 The 1 min QQQ is looking stronger than anything else right now as far as intraday 1 min charts go, it's actually kind of interesting and may be a position in the very near future if this migrates.

QQQ 2 min so we are starting to see some accumulation, THIS IS NOT ENOUGH ACCUMULATION TO CONFIRM A LARGER BASE.

And the 5 min chart which hasn't seen enough accumulation to move it at all.

IWM

 The IWM 1 min is going positive here as you can see and a bit more lateral as far as price, we need a reversal process before we consider any longs and stronger divergences so this is a time for short management and patience. This is why I have kept the bulk of positions short and traded around with options on the shorter moves that have good signals.

 IWM 2 min looks like there's been a little accrual from some earlier positive divergences in the day.

 The 5 min is in line. What I'm trying to show here is the accumulation to the left, it could have been a smaller "U" shaped base and just wore itself out on the release of the minutes in which case I'd say 85% chance they were leaked late last week.

SPY

 This is roughly the area the SPY would have to catch down to for a "W" bottom, there's no rule that says a bottom has to be a "W" formation, it's just a common one to see because it's easy to head fake on the second low and it's usually proportionally the right size for a reversal process.

 This is the same chart, I just found all the drawing on the chart above distracting so I put the same one with only the support level so the divergences were clearer to see.

As for the 1 min, from in line to a positive divegrence.

I definitely took gains too quickly, but you only know what you know at the time and what I knew was the TICK dynamic was changing so I don't beat myself up about making a call on objective data and neither should you, it's the emotional calls that I don't like.

SPY 3 min, AGAIN, THIS IS NO WHERE NEAR ENOUGH EVIDENCE TO SUGGEST A LARGER BASE, BUT IT'S ALSO EARLY IN THE PROCESS SO PATIENCE ...

Index Futures...

 ES/SPX Futures have a positive divergence intraday 1 min, TF and NQ (R2K and NDX futures) were in line at last check making ES the leader thus far, this is obviously not a chart captured 1 min ago so the market has moved a bit since, the divergence is roughly the same though.

 As far as the 5 min, I felt great about the Put position last night after seeing 5 min negatives like this in ES and others, but this more important timeframe is showing a relative positive, it is the weakest form, but it has to start somewhere.

 This is the 5 min NQ with a relative positive and TF looks the same, again not enough proof to say this is accumulation for a larger base, it may be just for an intraday move, it may just be there trying to halt the decline a bit as in PPT interference (trying to maintain an orderly market).

 The TICK data is interesting though, even though it is skewed heavily to the negative at -1250 it is much more lateral, just extreme volatility.

My custom TICK 1 min vs SPY is showing a bit of positive action building .

So I'm going to look around some more, also check on some other positions that are open and see what we have.