And I'd really like to see it do so as there are short term trades that are on the edge in several assets, the core positions I think need to be left in place and look at the market in terms of the trade rather than in terms of a longer term trade, but making decisions based on intraday moves and signals, it doesn't match up.
In any case, there seems to be enough of the right kind of divergences in the 3 SPY arbitrage assets (HYG, TLT and VXX) on the right chart, 5 min, to allow the IWM 5 min positive divegrence to finally fire,
however an intraday pullback that showed accumulation rather than just in line would go a long way toward confirming that probability and would let me know if short term piggy back trades are worthwhile, in my case, specifically the IWM call addition, however any number of leveraged ETFs would do the trick.
Looking at leveraged ETFs, inverse and just leveraged, I see a decent probability of the IWM bouncing, strangely though there's no confirmation for TQQQ/SQQQ therefore QQQ. I'm having the same kind of trouble with 3x leveraged SPY, DIA and XLF as well. What seems clear is at least a short term pullback as mentioned in the last post. The 10 min charts are solid for continued downside, it's the 5 min charts that are the near term bounce and thus far the only one that has a decent signal is the IWM.
Again, it's the 5 min charts and not much beyond that. I took a quick look (there are too many charts to post intraday) at breadth indicators again which have seen a dramatic decline which I've only seen twice since I've been watching these which is at least once a week for probably close to 15 years, that was the 2007 top and right now. I'll get some example charts up at some point,
so the 10 min negatives after a 5 min positive like this make perfect sense for a normal lower high/lower low trend which requires a bounce and it absolutely normal.
QQQ 3 min intraday with a sharp negative divegrence, thus these should come down and that's where the useful information is, to see whether 3C accumulates the move down or confirms it or if it does both in different averages which is a possibility.
QQQ 5 min has a positive divegrence at yesterday's lows/capitulation selling or volume event.
As I said yesterday, technical traders almost always take this as a bearish short term sign and expect the market to be down more the next day, but I've found it's almost always a short term reversal and by short term I mean often a day or so.
In this case, the QQQ 5 min divergence is very weak. After this comes the 10 min which is horrendous.
IWM 1 min intraday shows distribution in to higher prices today, the question is whether there's accumulation in to lower prices, that's the game.
And the IWM 5 min has maintained a strong chart through the week despite it has made no bounce.
Here's an HYG 5 min chart with a positive, for the SPY Arbitrage (short term market manipulation lever), HYG needs to move up, TLT and VXX need to move down. However there's a lot going on with bond shortages and "fail to delivers" so the charts in bond related issues may be very complicated beyond what we'd normally expect.
Still, for now the 5 min TLT shows a negative which is in line with activating the SPY arbitrage.
VXX 1 min is leading positive intraday which is in line with a market decline very short term, as in the next tradable move, but...
The 5 min looks like it saw distribution in to yesterday's highs and is also in line with activating the SPY arbitrage which really just fools algos in to thinking the market is risk on as the defensive assets retreat and the risk on HY credit asset (HYG) moves up and the algos follow the signal, simple as that.
Intraday the Most Shorted Index (yellow) vs the SPY tried to move higher on a squeeze one more time , it looks like the market is getting a little traction from that now, so our decline may have to wait until the close or perhaps Monday, we'll see what 3C charts look like at the close as they almost always pick up where they left off on the next trading day.
The bigger picture of Most Shorted Stocks is very much in line with the larger macro trends, the 10 min plus 3C charts, the market breadth charts falling apart dramatically, the 10-year rates nose-diving and the SKEW remaining very elevated while the F_E_D seems to be in an increasingly contradictory mood, almost panicked, actually panicked as they seem to have several problems on their hands from inflation mixed with REAL falling wages, not inflation adjusted, their balance sheet being inflationary and the whole lack of bonds for collateral as we saw at the end of April and Q2 with the F_E_D's reverse repo facility setting all-time record 1-day borrow highs as banks have no collateral to leverage up their assets which the F_E_D is increasingly concerned about as they sent out a letter asking dealers why there's such a large "fail to Deliver" in bonds, the answer is simple, the F_E_D owns most of them.
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