Perspective

In an earlier post today I tried to show short term signals and what direction they'd likely take and what 
I think the risk is and where the probabilities are and why I'd rather (from a risk perspective) short price strength and underlying weakness which is already evident (underlying weakness) and not likely to change, rather than try to trade this market long which is dangerous in several ways  including the meat grinding choppiness of the market, the multiple timeframe analysis with multiple trends in stage 3 or 4 and the signals which are the probabilities, I showed you all of this with the SPY, QQQ and IWM, but I didn't realize how well it can be seen and understood using the DIA.

Her are the charts... *Note that I'm not saying there's nothing out there I'd trade long, I'm saying the evidence would have to be overwhelmingly strong and as you know I like to trade these moves both ways, but there's a time to be careful and if ever there was a time it's now more than ever. This applies to individual equities (stocks) too because the broad market is responsible for about 2/3rds of the movement of any given stock on any given day, meaning the greatest influence on whether your FB or GOOG trade moves up or down is the general market's direction that day, there are caveats like news and earnings, but generally speaking the market is the most powerful gravitational force on individual equities, about 2/3rds.

I'm going to say there are 3 cycles (probably more), but the ll of the except the NDX is the February cycle which is still relevant.

The medium cycle that is still in effect is the bottom or base of April 11th (which is when we first noticed it and started moving things around to take advantage of it (which started moving around April 15th). 

April 11th posts... Market Update "So far, nothing "seemingly" unusual, it looks like a normal op-ex pin. However there are some interesting developments in both the shape of price (reversal process) and the divergences building beyond simple intraday steering currents which are in effect" 12:44 p.m.

Closing SQQQ (long) Trading Position 1:10 p.m.

EOD--- "Really simple bottom line, I think we have a base developing, not much has changed today perhaps due to options expiration, but there's still not enough for me to jump in yet and thus I'll wait it out and see what Monday brings." 3:56 p.m.

April 15th

Broad Market Update "apparently working on a larger "W" base. I do believe this is a tradable base and that we are VERY close to an area where we can take some low risk/high probability positions, however I have no reason to move the targets on the upside I posted Tuesday and Friday of last week, posted again today." 1:16 a.m.

Trade Idea: Opeing QQQ May $84 Calls "I think I'll go with a full size position here." 12:54 p.m.

Trade Idea: Entering URTY Long (3x leveraged long Russell 2000) "This is a trading position, full size." 2:56 p.m.

These are just a few example posts; you know it's been a while since I put out multiple full size positions all the same day or closed multiple shorts at the same time, that's because we were at a low risk, high probability entry and look at April 11-15th, you'll see it was the bottom of a pivot and new medium term cycle.

The small cycle started around April 28th and is still in effect.

DIA charts

 DIA 1 min intraday with the distribution yesterday at the highs as the market broke north of the USD/JPY correlation, then positive divergences today intraday that came down in the afternoon due to movement in the USD/JPY, but even more than the movement, the underlying floe of trade, we see that with 3C, but they can see that via order flow, market makers, specialists, etc., they have a better feel than anyone for which way something is going to move before it does, that's why we can see these signals because we are following their lead.

 For perspective, this is the same 1 min chart viewed at the trend level even though we usually use it for intraday signals. This is the short term cycle from 4/28 and you can see we'd want to be out of longs by 5/1 or 5/2 as distribution set in, lateral chop and downside.

Look at the current 3C signal now at slightly higher prices.

 This is the 2 min chart, it was positive intraday today and saw a negative with the USD/JPY

Look at the same chart's trend view, these are not high probability long signals.

 5 min DIA with distribution yesterday at the highs, a positive divegrence today and what appears to be in line at the green arrows. However, look at the trend of the 5 min chart.

 You see the clear, strong accumulation of the 11th, 14th and 15th, you saw the posts above, exiting shorts and puts on the 11th and entering calls and longs on the 11-15th. Really I'd want to largely be out of most of those ;longs by distribution at the 22nd through the 24th, after that it just becomes a meat grinder with all of that chop, very difficult to maintain any position and this is why there have been so few trade ideas recently because the market is not conducive, but we don't know that from the trend, that comes after, we know that from 3C before price has even moved.

Look at the current leading negative divegrence.

 This 10 min chart takes out a lot of detail, but a lot of noise also and reveals underlying trend cleanly, it's clear there's a leading negative divegrence.

Think about it, the only hope we are seeing for the market is a short term move in the USD/JPY above $102, that's not a lot to hang a long trade on.

 The 10 min chart (same as above) in the short term cycle from the 28th which is really in stage 4 a, it broke from the top to decline and saw the first thing that happens after the move to stage 4, a volatility shakeout and it looks like we are nearing the end of that which should send the DIA back to stage 4 decline and a lower low for this short term cycle, but also the medium and long term cycles as well.

When multiple timeframe analysis lines up, it's like hitting 3 cherries on a 1-arm bandit (slot machine).

DIA 15 min chart, I labelled the February cycle that is still in effect with larger 1-4, I labelled the April 11-15 medium cycle with smaller 1-4 and I labelled the April 28th cycle with even smaller 1-4.

Look at the 3C leading negative divegrence.

This I kept clean, a 60 min chart of DIA from the start of the Feb 3rd cycle, the red area would be the top or stage 3 (depending on the average) or some version of stage 4, typically the volatility shakeout bounce.

Note the 3C trend, that's as clear as I can make it. 

We want to trade moves like the Feb 3rd base and we did and get out before it turns in to a meat grinder (red box) and get back in on price strength for a move to the downside.