Market Update

We have a "potential" opportunity for the "Come to us" trade, excellent entry, high probabilities, good timing and low risk.

Right now we don't have a lot to point to and say, "this set up is high probability", what we do have is the fact that we are at late stage 3 (or stage 4 with a volatility shakeout that will resume to stage 4 decline trend) in 3 different trends, perhaps more and we have market psychology concepts that have worked for these set ups numerous times. 

A lot of us already have short positions on, some of us don't, some like me do and want to add, this is what we are staring in the face right now, that potential opportunity and the set up is fantastic, but it's emotionally grueling as many of you know.

As for the update, first I'll start with what first gave away a potential trend change or at least a halt to the market downside, the NYSE TICK data which I encourage you to use with trendlines as we get some great early signals there before price even thinks about showing us anything.

This was the downtrend in the TICK data and the early warning of the first higher low and higher high above the channel, now we have a channel that's rising and hitting extremes at +1000, about what we hit on the downside, -1000.

Now I'll give you a look at probabilities using the QQQ...

 This is the intraday QQQ, which with AAPL, was one of the first to put in an intraday positive divegrence.

We are getting some migration of that divergence now to the 2 min chart (this is a process, the stronger the divergence, the further it will move out in to longer timeframes with stronger divergences).

As far as the probabilities, like I said earlier, we had good information that the market was headed up April 11th, we closed shorts and puts and opened longs that day and the following days to the 15th. The 22nd area to about the 24th, depending on the asset was the time (in my view) to exit those positions if you hadn't already, what was to follow is chop and we had a lot of it, it's a portfolio killer, very difficult to make money in narrow bands of chop, VERY easy to lose it, THIS IS WHY THERE HAVE BEEN SO FEW TRADE IDEAS RECENTLY, THE ENVIRONMENT IS JUST TOXIC, but indicative of  stage 3 / distribution.

The divergence grew worse to a current leading negative worse than before. To think we were recently at new Dow highs while this is what the underlying trade action looked like.

This is the QQQ 30 min chart, the February cycle was ended first in the Q's, it entered stage 4 first and retraced just about all of the Feb. cycle, and as to the bounce from mid April, look at the 3C divergence, leading negative.

The probabilities are firmly planted to the downside, the short term charts may give us enough of a lift to have the short entries come to us rather than chasing them and getting shaken out of the trade.

As for the other averages...

 The DIA with the late day distribution we talked about and an in line trend intraday which is now starting a positive divegrence.

I don't have anything positive on the IWM right now, just in line. Really the signals we have right now are no more than consolidation at best. However, it's the market concepts and psychology that give me some faith that these divergences will mature and the probabilities will be with excellent trade entries in assets like AAPL, a new NFLX position, all of those charts I saw on Friday and said, "Almost, but not quite".

The SPY 1 min from negative late yesterday afternoon as the VIX smash couldn't lift the market any further and in line on the way down to a positive developing now.

As for Index futures, NQ (NDX) is leading positive, ES and TF are in line which is better than the leading negative they were flashing earlier.