Market Update

Patience is the only game right now. As mentioned earlier we have a larger base pattern forming which required the market to pull back a bit as accumulation doesn't occur in chasing higher prices, but accumulating lower ones.

There are a few things I'm waiting to see before I decide whether or not to add any short term long, "Bounce" plays, I had mentioned FAS as a possibility. Here's what we have and what I'll be looking for either way. I think on the next IWM move I'll likely close the Aug 8th $110.50 calls and if I still like the idea of an IWM bounce, open up some longer dated expiration calls.

 This is the highest probability "short term" chart, 15 min leading positive SPY, so this suggests the bounce we were looking for this week after a broader base had been created which appears to be what's going on now.

This 5 min SPY chart has a positive divegrence and has a negative divegrence most recently which is creating the larger base, but this chart will have to show a positive divegrence in to the price pullback for me to enter any bounce longs.

This is a rough picture of the small inverted H&S-like base, the main point being its wider than what we had yesterday which really could not support much of a move, note how the IWM looked the best earlier as it had a stronger base as of this morning than any of the other averages as covered last night.

The SPY 1 min is still in line, this is the first place I'd expect to see accumulation of lower prices, the market "can" bounce without accumulation, it's just not a bounce I'd want to be involved with on the long side at all.

The 2 min chart is in line as well, it would almost certainly need the 1 min to go positive first and then migrate to this timeframe and ultimately at least to the 5 min chart , turning that back to a clear positive before I'd consider any bounce longs, otherwise I'll just leave core short positions in place and look to add to them when the opportunity is there.

So for now, in my view the best thing to do, the only thing to do is to be patient and see what message the market sends us and whether it's one worth acting on short term. For now, there's not a whole lot to do.