Market Update, More Progress Toward a Bounce

In last night's Daily Wrap I posted the following

"SPX with what is about an appropriate size (proportional) reversal process with a Star and a 2-day "Tweezer Bottom) right at the 100-day moving average. Part of me wonders whether today's intraday negative 3C action is setting up an early morning, more aggressive stop run below the 100-day before reversing to the upside. Again, we need to show some patience and see if this may be the case or if the negatives on mostly 1 and 2 min charts (perfect for an a.m. stop run below the 100-day, creating upside reversal momentum as new shorts entered and are squeezed) are going to start migrating (showing a stronger negative divergence) to more important timeframes like the 3 and 5 min charts.

However, on a daily chart basis, this looks very much like an upside bounce is more than ready to go."

Thus far today, that's exactly what we have seen despite a gap up from overnight futures levitation which had me a bit flummoxed at first as the intraday charts from yesterday suggested a break of the SPX 100 and accumulation below the 100 were the higher probability, it didn't take long to sort that out.

As I said last night and today, we can only verify a move below the 100 m.a. is a head fake via positive 3C signals as a small reversal process unfolds, thus far that has been on track as well.  As many of you know, a head fake move is one of the last things we see about 80% of the time no matter what timeframe reversal you are looking at because it provides a kick start to the reversal's momentum (see "Understanding the Head Fake Move" posts which are linked on the members' site).

Here's what we have as of the last capture (keep in mind these intraday charts move fast so many are already looking better by the time I capture, upload and post them.

 IWM 1 min, the first thing we need is a lateral turn from down to start a reversal process and accumulation which we see here.

The next thing we need is to see that the divergence is growing stronger by migrating to longer timeframes.

IWM 2 min is positive as well

As is the 3 min. I'll usually consider a trade by the time we have a 5 min positive divegrence so I may consider some sort of IWM position or hope the weekly I have takes off in time.

Just remember what the big picture is and that any long positions should be speculative as this 60 min IWM chart shows massive long term distribution that has picked up significantly since July 1st.

 The IWM 15 min positive divegrence/base puts the short term probabilities of seeing the intraday positive divergences we are looking for, fairly high, just as the 60 min chart puts the longer term resolution after any bounce to the downside.

 SPY 1 min

SPY 2 min

SPY 3 min is starting to lead now.

The Q's are leading positive out to 3 mins already and since capturing these charts, the Q's are now seeing migration to the 5 min chart with a small leading positive divegrence already in place.

I'll let you know if I decide to take any action on short term positions.

There are some core shorts like NFLX that are stating to look appealing for a new short entry or add to position on a longer term basis, however I'm inclined to wait as any bounce will likely lift positions like NFLX higher giving us a better entry/position.