Market Update

Now we are getting somewhere. As posted last Friday, yesterday, last night and this morning, the area in which I expect us to be able to take reasonable, low risk action on a swing worth trading rather than messy chop, is a bit below and as such we've needed a pullback which is what 3C was indicating late Friday for the early part of the week with a bounce following. It's probably already clear, but I want to use the pullback and what I expect to be positive divergences as the pullback nears its end to enter positions for the first of 2 trade set ups, we've just needed the pullback for the 3C charts to start to go positive assuming everything is still on track and I have no reason to suspect it's not.

The JOLTS Job openings came in at a record pace not seen since 200 which means the F_E_D can proceed on course with their "hawkish" exit from accommodative policy even though it was just yesterday that the F_E_D's Fischer rang a more cautious (Dovish) tone about the state of the economy. Regardless of what the data says, I think the F_E_D wants out, NEEDS out and not just from an inflationary point of view or the fact that a $4 trillion balance sheet has yet to create a recovery, I think it has something to do with the fact that the F_E_D has shareholders and can only take things so far before they start making noise.

In any case, this is what we need to take any short term bullish action.

 QQQ 1 min still leading negative which is what we need to see at least until we have a pullback that fills the gap and then some, in fact last week I suspected a possible move below $93.85, a real head fake move.

This is the 3 min chart which along with 5 min charts have suggested there's more downside to go since there has been no start to accumulation on the 1 min charts, that's because there not going to accumulate until they're at the target area which usually means they need to take price down to a level where sellers will step up and create cheap and plentiful supply.

The danger (which really isn't a danger if you are positioned net short in your core/main positions) is that the larger base positive divegrence in the 10/15 min range starts to fall apart, in that case a bounce starts to look less likely and an all out decline more likely which is why we wait for the right entry on the long side with the right signals and otherwise keep the bulk of our portfolio in lockstep with the highest probabilities which are solidly to the downside.

 So far the QQQ base/divergence is holding up just fine so this keeps the plan of action laid out last night and reposted this morning, still in play, that looks something like this (this is conceptual, not  specific time-tables and price levels)...

This was the chart from last night's post and the expectations from yesterday's close, first a decline to point #1 where we should be able to enter smaller/speculative piggy-back long positions like the calls I've been talking about or leveraged ETFs and then #2 which is the actual bounce off the base in which we can enter core/long term position shorts and some select longs.

So far we're on track this morning.

IWM 1 min intraday on track

And the 15 min positive divegrence is still in place so our action plan is still viable.

The SPY's 5 min chart which will have to see some repair before considering taking on any serious long/bounce plays...

However the base divegrence is still in place on this 10 min chart and even all the way out to 60 min (see below).

 SPY 60 min positive divegrence.

Here's the TICK since this morning, you can watch the channel and any break for an early head's up of a changing trend which should move to lateral to create a reversal process and positive divergences. We have hit some lows of -1350 this morning so there's a good deal of selling.

And my custom SPY/TICK indicator's trend.

It's still just a matter of patience.

I noticed HY credit is still holding up and supportive of a bounce.