"...we have positive divergences this afternoon, the chances are VERY high that we'll have positive price activity early in the week (next)....I'm not sold on an immediate move Monday morning, the reversal process in the averages to me looks incomplete, a pop higher immediately would look a little premature so I wouldn't be surprised if there was a little more lateral/sideways work done in the major averages, but that's an opinion, the most important thing for near term trade is there are positive divergences.
Also remember that no matter how far they may have reached, like the IWM out to 10 mins intraday today, it's still only 1 day of positive signals meaning it's a small base/foot print and the best analogy I have is if you put 1 gallon of gas in your car, don't expect to be driving across the state.
As I said, I'm still leaning VERY clearly net short, I'm not worried about a bounce, but if you can hitch hike a little ride and make some extra cheese, why not. The VXX/VIX futures are still KEY to timing our downside pivot."
As for the charts, I didn't include the longer term (which I'm thinking should be around mid-week) negatives that a bounce sets up because I included those in previous posts already today, we're just looking at the immediate future for a short duration bounce and possibly a little stronger head fake move as the one from April 2-4 was very weak.
I didn't notate most of the charts because the divergences are so clean and clear, this is a great time to learn divergence analysis if you haven't already and I don't want to crowd the charts, just remember we were looking for higher 3C signals in to either sideways or lower prices and we want to see some reversal process (sideways movement).
What you should notice now is that there's migration of the divergence in ALL of the averages, all 4 averages confirm each other.
The VXX (Short Term VIX Futures) "Should" have nearly the exact opposite 3C signals although there is a bias toward accumulation in VIX overall, however negative signals in VXX would confirm the averages above.
As far as the flying, leading positive divergences we are looking for in VXX to signal a downside turning point in the market of some real importance, this 15 min chart is showing the collective accumulation in VXX, it needed to be sent lower again into the accumulation zone for the divergences to continue to build, but compare the 15 min VXX leading positive above and now check out the SPY's 15 min chart (it should be nearly the mirror opposite and this represents the larger move...
This is the SPY 15 min with the entire February cycle which started with accumulation on Jan 27th through Feb5/6 and then stage 3 distribution (top) and the leading negative tells us all we need to know, use price strength to short in to.
VXX reamins the timing indication, but they aren't going to chase prices north to accumulate a large position so this market move to me seems to be more about the VXX than a head fake move or bull trap, although they could kill two birds with one stone.
And we are off.
I checked GLD/GDX/NUGT and they are remarkably quiet today, very much in line so as far as I'm concerned, I have no reason to move those positions (UGLD/NUGT long) and they'll remain in place.
Just going to check leading indicators to see if there's anything of interest.
At this point you should already be set for the move so it's just about managing the positions, maybe some opportunities here or there, but the next task will be looking for the end of this move, I'm thinking around the F_E_D Minutes mid-week, and watching VXX for more signals like the 15 min, then moving in to whatever short positions you may still be interested in, although I think most of us have already made those preparations.
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