Second Market Update

If you set the price alerts for the ETFs of the major averages that I suggested yesterday and again this morning that will tell us when we have moved to the "area" of a head fake move, then you should have already received notifications that the QQQ and IWM triggered, the SPY and DIA have not yet, so it looks like what we were seeing yesterday and last night and expectations based on those charts, at least so far, are right on track, but I'll keep watching as that is one of several possibilities, just the one I feel is most probable and actionable as well.

As for current charts...

 This is the 1 min Yen, remember all we needed was for the Yen to appreciate and the $USDX to drop, we found some signals yesterday that suggested this would happen, at this point if you haven't read last night's Broad Market Update you might want to skim through it as thus far all of our expectations BASED ON THE CHARTS, thus far have played out.

The point of understanding the post from last night is understanding what we are expecting next and where the market becomes actionable for a high probability/low risk trade or set of trades and how that fits in to the bigger picture for the next round of trade set ups.

In any case, the Yen moved up on this morning's 1 min chart as I was thinking we'd see, but we'd also need the $USD to move down to effect the USD/JPY and market, or at least it would be more helpful...

And at the same time the Yen moves up, the $USDX moves down... this causes the USD/JPY which is now correlated to the Index futures fairly tightly to...

Drop as well at the same time, here's the effect it has on SPX futures at the same time...

ES 1 min

Thus the effect on the broad market and our head fake target areas have now been hit in 2 of the 4 averages.

Last night I showed 3 5 min charts of SPX, NASDAQ 100  and Russell 2000 futures (ES, NQ and TF), ES had a negative divegrence near term suggesting it would pullback which fit well with out head fake concept, especially given where we are in the larger "W" and yesterday's "W" that created the daily Tweezer bottom which is a very visible area for stops to be lined up under, thus a high probability head fake area and a good looking area to enter some longs so long as we can confirm accumulation and a small reversal process (all of this was covered in last night's post).

I didn't quite understand why TF and NQ didn't have the same 5 min negative that ES had which looked like this as of last night...

Even though we have an overall stronger positive in Es 5 min to the left, near term divergences to the right suggested this morning's price action, I didn't understand why TF and NQ didn't have the same divergence, but it wasn't anything that bothered me much. 

Now looking at the same chart of TF from last night or even today...

The fact that we have a move down toward the head fake area and a leading positive divegrence gives us EXACTLY what I said we'd need to look for, CONFIRMATION OF ACCUMULATION AT THE HEAD FAKE STOP RUN LOWS, so it actually worked out fine, I just had not looked forward enough in TF and NQ being events suggested by the charts had not yet played out.

 As for the SPY right now on an intraday 1 min chart, the negative intraday at this morning's highs are clear, the leading negative suggests that SPY will move toward our downside head fake targets.

I also said last night that the SPY 10 min chart was showing a stronger SECONG bottom divergence as it should in a larger "W" base, but it still wasn't that impressive that an upside launch looked imminient, thus a head fake move lower actually allows this chart to improve, actually any downside that is accumulated allows the chart to improve and give us more confirmation as to when it's time to start entering long positions for a bounce/hitch-hiking trade.

The yellow trendline is the area I gave as an alert area.

The "b1" is the first base of the "W", the "T" is the middle or top of the "W" and "b2" is the second base of the "W". The entire "W" formation WITH its head fake already built in can be seen below in the yellow box across the time scale.

 QQQ 1 min intraday, note there's no distribution as it turned down this morning, this is actually good for a head fake scenario and a long trade set up as it reflects that they are not letting out accumulated shares, but holding on to as many as they can being they only have a limited amount of time to put together their position and they are in much larger size than we can conceive.

 The QQQ 15 min chart and where the "W" area is on the timescale in the yellow box, also the head fake area or support at the small yellow trendline which has already been hit as well as a larger second base leading positive divegrence as we'd expect to see in one larger base rather than two distinct events.

The IWM which has already moved below support or the area I gave you for an alert and is already showing signs of accumulation, although for a real and effective head fake move, more downside and more accumulation as well as a clear reversal process for this move down this morning are also needed, this "can" all be achieved today.

IWM 5 min looks impressive as a divergence, but the fact it's only 5 min is a little problem, we want to see this move out to 10 or 15 min with the other averages, watch the price action around former support that was just broken this morning, that was the IWM $109.65 target I gave you last night and this morning.

So far, so good.