Opening Indications

That late day FAZ trade seems to have worked out pretty well so far, even better for those of you who went with XLF puts.

In any case, early opening indications suggest an intraday bounce off the a.m. lows, it's most pronounced in the SPY, more toward in line with the QQQ and IWM, but looks like it could still do a little backing and filling, although I will say if it weren't for the SPY 1 min positive (relative), I'd guess that the IWM/QQQ were more likely to linger in the area for a bit. DIA is a close second to SPY...

To give you some idea of the best looking (bounce) intraday underlying signals, here's the SPY 1 min.

This is a relative positive divegrence (a relative comparison between two points, it's the weakest form of divergence).

To give you some idea of what the Q's look like comparatively...

 This is the QQQ 1 min intraday with two relative points, "a" and "b", you can see 3C was leading negative as the day wore on and we have downside confirmation on the open and not much in the way of anything positive intraday, but it can build out a bit and if the SPY keeps up I suspect it may, keep in mind this is still an op-expiration day and the "pin" is likely going to dominate early afternoon trade.

As a reminder, this is the same 1 min QQQ chart. The small bounce "cycle" should be clear. #1 is the head fake move for the bounce cycle or stage 3 and #2 is a head fake for the preceding head fake move, in other words one is a little larger head fake and the second (following the fractal concept of the market) is a smaller head fake that was seen on the open yesterday, these concepts are scalable and occur in all timeframes.

However the feature here is the leading negative divegrence which is digging to a new low, making it pretty clear that this cycle is about to transition from stage 3 top to stage 4 decline.

As far as FAZ as many of you are asking about it this morning, I left room to add and I would like to do so, but not by chasing it.

 FAZ 2 min leading positive divegrence is just one of several charts that got me excited about FAZ (long), note the head fake move right before the move higher, you'll tend to see these about 80% of the time before a reversal as they are shaking out stops, triggering orders, etc. for a variety of reasons that I cover in my two articles on the members' site "Understanding the Head Fake Move", those articles are always linked near the top right for your review which allows you to understand why and gives you an idea of where you are in a reversal process and where and when the best entries and exits are likely, they're very good articles  or rather they explain a very helpful concept.

You can see a small relative negative divegrence intraday today, but we have confirmation of the move higher in FAZ today as well. Since there's a gap it's likely there's some backing and filling, but...

This 10 min chart of FAZ (without considering any others and there are others to consider), tells us that at least a swing trade in FAZ is likely so this is one I'm looking to add to.

If the market is going to fill the opening gap, then look for some rounding process intraday, a "V" shaped reversal (even intraday) is pretty rare.

I'll let you know if I see a decent entry/add-to for FAZ as well as a number of other assets I'm combing through right now as this bounce cycle looks just about spent.