A.M. Update

Friday I suspected we were nearing the end of our bounce off its base, I think it was a move designed to run a lot of deep out of the money protection buyers out of their positions since SKEW had been elevated so long and since it was apparent that those protection buyers were slowing as SKEW dropped.

In Thursday's "Daily Wrap" I put forth this theory and also noted as we neared op-ex that the upside ROC in SKEW was once again increasing, basically the older contracts were running off and going to expire worthless, but new contracts were being entered at an increasing pace late last week, I also though it might have something to do with the formation of the base and an expected bounce as well. The white arrow is how much SKEW advanced Friday alone, back in to the red flag area and you can see the increased ROC on the upside move from early August.

I suspect this is telling us that the bounce is nearing its end and downside protection which is normally bought in VIX futures is being heavily bought again in SKEW which means there's fear of an outlier, unusual move deep to the downside, a "Black Swan Event".

As for opening indications, not the best looking underlying trade, especially in Futures where the 5 min chart is my main barometer. It has been in line for the most part, now it's showing a clear negative divegrence, I almost always align my new trades with the signal of the 5 min Index Futures charts.

Here's the open and the 5 min chart...

 ES with a negative 1 min chart

NQ also negative in to the open...

And TF with more history showing a negative trend since futures opened yesterday.

The 5 min ES chart ( as well as NQ and TF) show almost all of last week negative and now we have a leading negative divegrence here, the first one since the bounce started.

As for the averages, I'll show the opening 1 min charts as well as their base charts in the 10-15 min range which I'm looking for strong deterioration in this week, most have already started.

 QQQ shows no confirmation as the open created a leading negative divegrence which had already been negative by Friday's close.

The QQQ 10 min base chart is just starting to see relative negative divergences, but now that the shell has cracked, deterioration can be very rapid.

 IWM was also negative in to the open intraday with no confirmation.

And is also showing deterioration finally on the base timeframe of 15 min.

SPY is in intraday leading negative position with no early confirmation attempt.

This is the only base that's still in line without a negative divegrence, but with Index futures' 5 min charts leading negative, I don't think it will be long, I expect we'll be in a reversal process sometime this week, where and when are the important questions and which assets are the right ones with the right timing.