Quick Market Update

I'd still like to see strong daily volume by the close for a downside reversal, the way the IWM sits right now, oif it loses ground in to the close, it will form a bearish reversal candle, Shooting Star, higher volume than the preceding day would make it a much higher probability reversal candle.

First TLT is seeing positive action, you have to look at the updates I posted in the TLT/TBT reiteration this morning, but I have suspected distribution in equities via a short squeeze is going in to safe haven and protection assets. This is one of the reasons I like TLT long or TBT short creating essentially a 2x leveraged TLT long position.

As for the actual 30 year Treasury futures...

This is the same type of positive divergence being seen in TLT right now on a suspected Channel Buster, which should give it a nice upside move through the upper channel. Also note volume.

I mentioned last week VIX FUTURES, not spot or the rolling 2 month VXX, are seeing positive activity.

 VX 5 min, also note volume.

VX 15 min, again note volume. If VIX ix a protection trade, Treasuries are a flight to safety trade, the volume is certainly interesting as well as the after hours volume seen in VXX two times last week which I posted here, Broad Market Update.

Transports looking as weak as they are looking taken with the COMPQX's major decline in the A/D line and Leading Indicators, all here Broad Market Update make me think this is the head fake move we were talking about around May 15/16th and as I said Friday, I expect it to start winding down now, it was clear that the IWM was going to see relative strength first as I think I posted that about a week in advance.

As for today...

As mentioned earlier, intraday breadth was falling apart...

The early action was trending up, it wasn't hitting any extreme bullish readings, then it lost the channel, early warning.

As for the SPY, that damage from last week that was on the charts other than the 1 min is still very much there.

 This is the SPY 5 min. You may also recall that the Index futures are seeing negative leading divergences in some cases all the way out to 60 min, but really once they get to 5 mins, they are worth paying attention to.

 SPY 10 min is showing how much ground the SPY lost in 2 days.


As I said Friday, (DIA) the averages all saw minor divergences on 1 min charts, steering divergences until Friday when they put in the largest divergence, really the only divergence of the week on the 1 min timeframe, another change of character.

 Again, a lot of damage in 2 days on something as long as a 15 min chart.

 The QQQ 1 min like the others was nearly perfectly in line on the 1 min with only tiny divergences here and there, like little tweaks to price, but come Friday everything changed, that continues today.

This is interesting because it was right about this time I had said the range was not likely to break down without a head fake move above it as it was a 3 month range and in the most watched ETF in the world, then we saw the bear flag with accumulation and suspected this was going to be used as a sling shot for upside momentum to break through the resistance of the range, we got that right down to the Crazy Ivan right after the bear flag, then short covering took over above the range or SPX 1900, however as the trend makes clear, there's been strong distribution in to that covering.

There are several reasons to sell/sell short an asset, but one of them isn't, "I think this is going higher".

QQQ 3 m also showing the change in character and deterioration late last week on a much stronger scale.

With transports not looking very good (I may look at a position there) and the Flight to safety and flight to protection trades both strong and the increased ROC in price , there are several very notable changes in character.

I'll try to get transports up next.