Market Update

So far it still looks like the most probable scenario described yesterday and last night, Daily Warp is still the most likely scenario.

We have essentially completed what I was expecting conceptually, although it doesn't look exactly like last night's drawing of what I expected which was this...

You can see where we ended yesterday and what I drew in for today as they are arrows . I expected price to come back down to recent lows/support and break below that (yellow arrows) which is a stop run, the reason is it opens up a lot of supply at low levels which can be accumulated easily, something that's important when you are trading in institutional quantity, not so much when you are trading 100-200 lots.

Thus far that's what we got today...

Price came down on an opening gap as Europe has proven "Nothing is fixed", we broke under recent lows/support (yellow) and volume popped up as stops were hit because technical traders are as predictable as the day is long which is exactly why I knew last night that we'd see a head fake move to run the stops last night before it happened today, Wall St. knows retail traders are predictable even better than we do so if you know what Wall St. knows about retail behavior, you can in many ways, predict Wall St.'s behavior.

The end result should still be what we were looking for the very first day of accumulation on Tuesday the 8th, a wider base. The market can only bounce so far and that depends on the base supporting it, even though the bounce ultimately is irrelevant, there are trades that can be made, there's a lot of useful information as well.

The next bit of useful information would come on an intraday move down. We wanted to see a move down today to see if it was accumulated, as far as I can tell it was, another intraday move down would help solidify that as this market is very weak so I don't want to enter trades or change positions without darn good reasons/charts to back up that decision.

Thus far here's what I have in Index Futures and the averages.

 ES/SPX Futures intraday have a small negative intraday divegrence, volume has fallen off significantly.

 NQ/NASDAQ 100 futures show the same thing, accumulation of the gap lower as we were expecting and intraday negative divergences that should turn intraday price down, which I'd expect to be accumulated and this is where we might get off some short term piggy back trades like call options or maybe leveraged longs, but I'd really like that confirmation of another leg down that is accumulated.

We have to keep in mid as well that we have an op-ex Friday tomorrow as well so we may be around a max-pain pin area.

Again volume has fallen off significantly.

 And the same for TF/Russell 2000 futures.

As for the averages...

 SPY accumulation of the lows/stop run and recent intraday distribution, very small, but I would have thought it would have turned prices lower intraday by now.

 SPY 2 min isn't showing anything out of the ordinary or unexpected I should say as this morning's gap down maintained a leading positive divegrence as 3C never followed price lower, The negative divegrence late yesterday suggesting a lower start to the day yesterday is clear at the red arrow.

 SPY 5 min maintains the overall positive divegrence from 6/8 lows and today's, the "W" or double bottom base I was talking about yesterday. Intraday inside the white box, there's a relative negative divegrence, this is a much weaker overall divergence than the leading positive (white box), but does suggest there's small distribution as we move higher intraday and prices "should" turn down, if they don't, I'm not comfortable chasing them (opening a long without prices pulling back and also confirming again they are being accumulated in to lower price moves.

 QQQ 1 min shows the exact same

As does the 2 min

IWM 5 min actually look interestingly strong as it is leading positive meaning strong accumulation on today's move lower on the open as stops would have created a lot of supply.

I might consider moving positions like SRTY ((3x short IWM) in favor of a short term URTY (3x long IWM) for a short term bounce, but to trade against the main underlying trend, I need more evidence and a less risky entry.

The TICK chart is suggesting these intraday negatives are about to turn prices lower which is where we can gather some good information. However, this isn't the first time today the TICK suggested a turn lower.

I'm going to check leading indicators as well as the momentum stocks and see what they are doing.