Market Update Charts

A good portion of what I believe to be evidence for a bounce, although I wouldn't go very far in describing it as a bounce, more like noise within a broader developing downtrend, is primarily in Leading Indicators, in fact the 3C indications were just secondary confirmation.

 This is the new SPX/RUT Ratio Indicator I'm using in Leading Indicators. First I want to show you the bigger picture because it's the most important and how the indicator has responded ioin both calling a bottom/base at the August cycle's base (8/1-8/8) and then how it called the head fake move and how it is leading price severely lower like one of our other mainstays, HY Credit.

 However on a very short term, while new lows were confirmed this morning, since then a positive divergence has been building in the indicator, we saw it in an earlier post.

 Again, bigger picture HYG vs SPX through the August cycle, not only leading the bottom by a week, also leading the lateral stage 3 top , leading the stage 4 decline, even leading the head fake move from last week that created the "Chimney", but most of all, leading the market lower and significantly, beyond what you see here (I have this scaled for the August cycle, the bigger picture is far worse).

 However intraday , while HYG has done what we expected in leading the market lower this morning, it has also let up on the pressure by moving sideways giving the market some chance without the downside pressure.

HY Credit doesn't appear to be leading anything to the upside, it's the fact it hasn't made a lower low since yesterday , it's a sort of passive leading, without having to take on any of the long risk.

 As for the August cycle and bigger picture, HY Credit led to the downside in late July (SPX-4%/RUT-8%) and then led with a positive divegrence at stage 1 (8/1-8/8) and bigger picture called a false move or head fake move at last week's chimney we had been expecting. Again the point is the bigger picture is where the juice is. Our last major position entry was at the 8/1-8/8 base (longs or cutting back shorts which have since been added back). This is the next major positioning area since the first week of August for the next major trend which has been thoroughly described for a while as, "DOWN".

 Interestingly out leading Professional sentiment indicators came alive this afternoon, they have been spot on and are leading positiver for a short term move.

 This is the second one we use as confirmation, it too shows the same short term bullish and I mean short term.

 Again, the same Leading Indicator on the big picture chart has the same leading negative in to late July and at stage 3 of the August cycle, leading lower like so many other indicators and 3C.

 Yields have been working recently as a short term leading indicator as we have typically used them, they led the market higher, lower and now have a small leading positive a bit higher.

The SPY 2 min has a positive divgerence through it which looks pretty impressive, but remember the timeframe of 2 min.

The 3 min is seeing migration and confirming, but again remember the timeframe.

And the SPY 5 min, this is migration of a divergence started today.

QQQ 1 min

QQQ 5 min also suggest near term upside,  unless a bigger base is being built, but I doubt it based on leading indicators.

And IWM 3 min is leading intraday.

As I said earlier, this could be for a number of reasons, we have one reason to use short term price strength.