Market Update

Today is very much like the general gut feeling I had yesterday which was summed up in the EOD Update...

I decided to just leave positions that have already been put in place such as: VXX calls, QQQ puts and an SRTY long, remain in place without subtracting from them and without adding to them....

While the SPX and Dow did make that higher high AFTER they broke below support to stage 4 (thereby shaking out new "confirmation" shorts), the NASDAQ 100 and Russell 2000 failed to do so...

It does look like a move to the downside is ready to break, however I'm not ready to load up the back of the truck until I see the same sort of 3C extremes in the broad market....

The 30 min chart still shows the positive divergence in what I was calling a head faked "W" base, but the negative divegrence isn't there yet, that doesn't mean the market can't or won't move lower from here, in fact it looks pretty likely that it does, but this is unresolved. Perhaps tomorrow this falls apart badly and then we'll decide how to react, but until then I'm weary that we may have a pullback that is a worthwhile trade, but not the one we are looking for.

This morning I talked about "pray for a bounce", of course that would take some lateral movement, the market rarely just turns on a dime and creates a sharp "V" reversal, that's what it appears we are seeing now which is still fine and I mean "fine" from a bearish, short perspective (if there's a bounce worth trading I'll mention that too).

 SPY 2 min chart with some intraday positive 3C action as a lateral zone is being formed,  as I said yesterday, "A Move down, but NOT the one we're looking for"...yet.


 The SPY 3 min in perspective from yesterday's head fake/distributive move...

The exact same 3 min SPY chart zoomed to intraday , this is basically in line, it's not really a positive divegrence.

 This is the 5 min IWM as a small positive divegrence has migrated out as far as the 5 min chart, it is still within a deeper and larger leading negative, but this looks to be the intraday action I mentioned earlier, "Pray for a bounce".

 This is the same 5 min IWM chart zoomed in to intraday so as you see, it's also not really a positive divegrence, more in line than anything.

The QQQ 5 min

And the QQQ 5 min zoomed in to intraday, this is slightly more positive with a small leading component. The point is the price action (generally speaking) I expected yesterday (for today) and what I saw this morning seems to be taking some shape, this in my view is a good thing, those targets were left unresolved and I'd much rather see a bounce with very weak underlying trade as we are seeing form right now than something with strong underlying trade, but based on the distributive nature of yesterday, I didn't really expect to see anything strong.

I'm going to be patient here and continue to poke around a bit more, the Options that are open (QQQ Puts and VXX calls are May monthly expiration so I'm not concerned about them).