Friday's "Week Ahead" post was one of the few in which short term direction for the market in the coming week was not obvious so I labelled this week as "More of the same" with the caveat that I think we'll see the market in stage 4 decline before the end of the week, but until then, either more of the same chopping sideways (remember intraday lows last week took out the entire trading week's lows in all of the averages and in the Q's and IWM, took out two weeks, creating a new low (intraday) for the last 2 weeks. From the size of the reversal process and its proportionality with the 2 prior stages, it looks to be about the right size so a head fake move would likely have to come rather soon and the only near term catalyst I can think of at the moment, given the ECB was a flop, is AAPL tomorrow.
In any case, we saw this a number of days over the last few weeks as the market has lost momentum in which the indicators turn negative in to the European close and often after the European close, it ha sort of become a recent trend, today was no different at least thus far.
The SPY 2 min was already losing its foothold and turning negative on the open and before, however after the European close it's now moving toward new leading negative lows.
While not a screaming divergence, the 3 min chart is not only negative at the European close, but continues after to lead to a new leading negative low out of context with price (this is not confirmation).
Intraday Q's show it pretty sharply right at the European close with a leading negative
As do the 2 and 3 min, but more interesting...
The 5 min QQQ which did not see the same small top off or positive divegrence at last week's week/multi-week intraday lows, is taking it a bit harder than the rest.
This is just this morning, but put in to context...
The Q's are seeing their 5 min chart (which is the first or earliest timeframe we see significant institutional movement intraday) hit new leading negative lows and it was already in a very soft patch to start this morning.
The IWM which has looked the best for underlying trade saw the same divegrence at the European close
And surprisingly it has moved all the way to a 5 min chart with a leading negative divegrence.
These alone aren't air raid sirens to quickly jump in to anything short while you still can, but they are red flags that , if they got worse, we may just need to move a bit faster than I'd like since so many of the trade set ups are moving in the right direction, SCTY just set off several triggers as I have been looking for it to make a move higher through an area of congestion.
This was not just a 3C divegrence, the NYSE intraday TICK hit a negative of nearly -1400 which is an extreme amount of selling.
And here's Es's VWAP on the day, very choppy and sloppy and VWAP continues to move laterally or slightly down.
In other words, this is essential to keep a close eye on as this can get out of hand real quick.
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