Market Update

All I keep hearing is how longs (and traders in general ) are getting chopped up in the volatility of this market, yet we've had some of the best trades in the same conditions....

From Sentimental Sam (who tracks retail sentiment via several different sites- straight from the horse's mouth)...

" The twits are turning to chopped liver and EW guys advising not to trade a "B" wave as it's too easy to get stopped out."

*"Twits" being those that he tracks on StockTwits*

 I'd probably expect a max pain pin tomorrow, typically the pin is in the area on Thursday's close (Today's close this week because we are closed Friday). Remember that the pin usually lasts until about 2 p.m. and this is a monthly, not weekly op-ex. Usually around 2 p.m. or so the pin is lifted as most contracts are closed by then and price will do as it wants and usually have very little to do with trade the following week, however the 3C signals the last 2 hours of the day almost always pick up right where they left off on the next trading day, even over a 3-day weekend, assuming nothing horrible happens in Ukraine, but the market seems to be largely shrugging that off any way.

In any case, here are the charts...

 SPY 1 min intraday is still leading negative, it really "should" come down, but remember I'm not expecting much more than the pullback discussed yesterday.

SPY 5 min is showing a clear negative divegrence intraday as well, it's starting to lead which means it's picking up some strength.

 As far as the bounce/rally or whatever we want to call it, the base is still very much there as this 10 min SPY chart reveals so I'd like to get back in to some longs like the URTY position closed this morning, I'm glad I closed the Q's as well, they'd just be sitting there losing value ion this kind of market.

QQQ 1 min leading negative like the SPY

The QQQ 10 min base is still in effect and still healthy, but you can see today's intraday negative on this chart in relative form.

 The QQQ 15 min is "one" of the stronger 3C relative performers.

IWM 1 min is in leading negative position, but it doesn't look as bad on this one min chart, I suspect that is because as of yesterday the 3C signals in the IWM really started to catch up to the QQQ 3C underlying trade.

The IWM 5 min looks good, but it does have a relative negative today and that's a 5 min chart so it's a pretty strong signal for a pullback. The area of the head fake move yesterday which broke below recent support as well as the R2K's 200-day moving average, was VERY effective in accumulating that supply created by longs stopping out, the next chart demonstrates this.

 IWM 10 min, look at the relative positive divegrence cruising along and then at the head fake move down we get a leading positive divergence shoot nearly straight up.

As for the Index Futures...

 Yesterday I said we "use" to make short term trades on the positive 5 min chart of ES, ironically the short term QQQ calls worked out, now we have the same kind of 5 min signal that we use to trade very short term except negative.

ES 1 min isn't as noticeable, that's why I like slightly longer charts to clean up the noise, but you can still see negatives in the right places.

The NQ 5 and 15 show signs of a negative divegrence even though the overall main character of the chart is leading positive, however that doesn't lessen the reality of the negative in place today although on a relative basis (weaker) which fits with our pullback scenario.

TF/Russell 2000 futures (IWM) shows the same head fake I was just talking about and the divergence in to it, we also see today's negative action as far out as 5 and 15 mins so it should come to pass shortly.

I started looking to the VIX Futures for confirmation of what I was seeing in the Index Futures as well as the averages, that's when I noticed that there are strong enough signals there to warrant at least a spec trade, this is the 1 min intraday VIX futures trend, very positive.

Also note the flat range, this looks boring, but this is where we see the most underlying trade activity as they are sticking near VWAP and being quiet about what they are doing as to not attract attention before their position is put on, these are some of the best chart/price patterns to find strong 3C signals.

The 5 min VIX futes is leading negative as it should be considering all the other charts above, but has a relative positive like many of the charts above, just the mirror opposite as VIX trades opposite the market for the most part, that's the natural correlation any way, although we've seen it broken, recently at the February rally we saw VIX moving up as the market was as well.

 VXX 2 min

VXX 3 min migrating the divergence.

VXX 5 min with a small reversal process in place, it is proportional to the decline from yesterday and it looks like we even have a probable head fake move that just occurred in VXX, that's an excellent entry area for VXX calls so long as we get good confirmation which we don't have yet as it's still very early in the head fake process.