Market Update

Today's market reminds me a lot of yesterday's, divergences just are not holding, but that's not the extent of the weirdness.

For example...

 This earlier IWM leading positive divegrence should have made a new 3C high on a lower low in price, instead it's in line or price/trend confirmation. Yet there's no significant distribution signals like there were early this morning on the gap up.

 QQQ intraday was leading positive earlier and technically is still at a positive divegrence with the lower intraday low, but we should see a higher 3C leading positive divegrence and yet again there are no distribution signals as 3C on this last move down is closer to confirmation than a divergence.

 The SPY as well saw a clear intraday negative on the gap up sending it lower and then a leading positive divegrence in to the noon-ish lows, there's no significant distribution signal that sent SPY lower from the 1:45 highs unlike this morning and technically it's still at a small positive divergence as a lower intraday low is made, however it should be seeing a higher 3C reading at that lower low.

This is very similar to the very strange intraday behavior in the market yesterday which I commented on in the first sentence of last night's "Daily Wrap".

However, where all of the divergences accrue, on longer timeframes...

 They are still positive and have solid chart signals as this one (15 min IWM) went clearly negative at the left sending it lower with near perfect price/3C trend confirmation of the downtrend and a very clear positive divegrence.

 The QQQ 15 min shows a building positive 15 min divegrence

And the clearest (simple with no noise) on the SPY 60 min is still there.

It's unusual for the intraday trends not to give clear positive trends that migrate out to these longer term charts.

I'm going to try to exit IWM $110.50 calls that expire tomorrow on any strength I can get and make a decision later, luckily this is a speculative position size, but I'm more concerned with re-establishing some short positions or finishing them up (add-to).

The XLF call expiring next week I'll hold for now because these larger/longer chart divergences are still very clear. Tomorrow is the typical weekly op-ex pin, so I'd doubt much would happen tomorrow, but who knows with the market acting the way it is.

What I do know is this is why I left the bulk of core shorts in place, even expecting a bounce with only 25% of NYSE stocks above their 40 day ma.a. 

On a day to day basis this market is very odd and difficult right now, but the larger trend or higher probabilities I have no doubt about and that's how I want the bulk of my positions aligned and anything that is counter those probabilities must be speculative in nature.

 30 min XLF

15 min XLF