Quick Market Update

Here are a few reasons I decided to go with the IWM calls when I did.

I was looking for the market to break intraday lows, that happened in the Q's and SPY, but not the IWM.

 The Q's did make the move I was looking for and maintained a positive leading divergence.

As did the SPY.

The IWM did not make that move to new lows, but with the others having done so I thought, "Close enough".

HYG which I showed yesterday as being negative in every timeframe or in line with the downtrend is showing a positive divergence out to 5 mins, this asset is commonly used to ramp the algos in to thinking the market has turned risk on as they interpret a move higher in HYG as an institutional risk on posture. Along the same lines...

VXX (Short term VIX Futures ) have a 5 min negative divegrence which suggests lower prices as you know, I was considering a VXX put rather than an IWM/QQQ call. In any case, lower prices in VIX futures are interpreted by algos as a risk on mode as protection is or looks to be sold.


The TICK chart also gave some signals, but unless you are use to looking at the intricacies of early changes in ROC, it's not as obvious as it will be later.

However my Custom TICK/SPY indicator is showing early changes in the ROC of its TICK indicator as it moves off the lows and to shallower readings, if all goes as expected this will move to an uptrend and in the green.

So far as I've been writing this there has been a small upside price move and the IWM calls are already in the green.