Market Update

There are hundreds of data points to check between assets and multiple timeframes, confirmation, non-confirmation, etc. so in some cases I'll be feeding this stuff out as I get it, but in my view it's all important as we have to know where we are, where we are likely to go next and where the highest probability resolution is so we know how to use each one of these moves. In my view, all of the market updates can be traded from, they are not just information.


Since you've already seen the IWM which has looked the best because it has lost the most,, I haven't included it. However, with a fundamental surprise (assuming that's what it is) like Yellen's slamming of momo stocks, Wall St. is assumed to react instantly as sellers, but more often than not they'll bounce the market like small caps, momos, the IWM and that's where they do their selling, that is what we have wanted to use this bounce for this week since we first identified the first probability of it on Tuesday and as it added to that probability through Friday, essentially doing what smart money is doing, that's why I have been holding off on short entries.

If Yellen's comments caught Wall Street off guard, then they'll accelerate the process, if not, then they'll stay on track, we always suspected a bounce would be led by momos and biotechs interestingly, this post from July 8th went through all of the set ups for the momentum stocks on a bounce including Biotechs, but even before that at the mid-May bear flag/head fake.

 SPY intraday 1 min, again not a strong timeframe, this isn't accumulation to start or add to long positions, this is intraday steering performed by market makers, specialists and HFT/algos.

In a fast market when a market maker has no choice but to take dropping shares at market price, they will want to unload them at better prices.


 The underlying damage that was seen yesterday starting on 3 min charts and moving to 5 min charts (3 min above) continues today as you can see,  it's almost as if yesterday's damage was on inside information of Yellen's prepared comments or her, "The market valuations are fine, EXCEPT in these stocks".

 SPY 5 min shows yesterday's damage and off the open, today's has grown much worse.

The importance of a 5 min chart is it's really the first timeframe where we see institutional movement on an intraday basis.

The divegrence from last week that helped us forecast a bounce for this week is now nearly destroyed, this is much faster than past bounces that were Wall St. sponsored.

 DIA 1 min showing distribution off the attempts at new highs and a small positive divgerence at the lows like the other averages.

The 2 min chart has no confirmation in the DIA

Nor does the 3 min chart and these are fast enough charts that they can confirm in an hour or so.

The 10 min DIA is already showing much heavier damage over the last 2 days, especially at this morning's gap up.

And look at the damage on a 15 min chart to the far right, the last 2 days only.

This is the longer term picture of the same 15 min chart with some SPX reference points. The leading negative divegrence is the same as the other averages at the area where we suspected the SPX would pop above the 3 month range, in fact in May my exact comments were that there would be no significant move lower before the obvious range is taken out on the upside with a head fake move and the leading negative divergences in the averages during this time period looks exactly like what we have heard from BAC and others dealing with institutional and retail clients, the first are net sellers, the second are net buyers, typical leaving retail holding the bag. You may recall the BAC chart of client types.

Institutional net sellers picking up activity, who are the buyers? Retail. This is in line with Apollo Group's CEO comments from last May, "We've been selling everything not nailed down for 15 months now".

I just recently posted the video of him at a Financial conference making those remarks which fit perfectly with 3C and Bank of America's client types.

 QQQ 2 min intraday accumulation of the lows.

Yesterday's 3 min QQQ damage

Yesterday's 5 min QQQ damage and today's additional distribution.

QQQ 5 min chart in perspective with last week's positive divegrence, it's nearly run out.

 QQQ now seeing leading negative 15 min intraday action

The MSI intraday

MSI over the last week plus shows these have been sold and shorted heavily, this is a macro trend, but also sets up a short term short squeeze.

And another view of a short term H&S top in the Russell 3000 and the MSI at the right shoulder dislocating negatively.

I mentioned strange accumulation in VIX short term futures, here's a wider look at a 10 min chart, note the accumulation is at the typical lows and leading positive,  this is one of many reasons I think this could be our last chance to get in to shorts while still in tops, another is the right shoulders of many H&S tops are already broken.

Intraday TICK data shows a massive selling reading of -1600 and on the upside mostly at +750 with a spike at +1000

My custom SPY/TICK indicator showing the intraday trend.