Closing Trade

Like yesterday the 1 min 3C charts of the averages show slight negatives in the SPY and QQQ , but in line for the IWM, which may have something to do with a 1000 contract TF_F trade in 1 second about 15-20 mins ago in Russell 2000 futures.

In any case, the IWM is definitely in the best shape of the averages and maybe it doesn't need to put in much more work, but it feels like a false start, that it could and maybe should put in some more work, although having a 60 min positive divegrence is nothing to scoff at.

The SPY and QQQ (this is why I chose the Q's for a call option today), stayed in the range for the most part and did the work today, not quite to yesterday's level, but either way, I think we are getting there.

I still feel comfortable with the risk levels considering the signals, I'd love to be long some IWM/URTY, but without the 1-3 min charts and 5 min with nice divergences like USO put in, it's hard to trust the timing.

As for the SPY and QQQ...

 SPY 2 min was in the upper half of yesterday's range, I'd have preferred it in the lower half as that's where more would have been accomplished, yesterday clearly accomplished more, but today was a positive day on the whole.

 SPY 5 min did some nice work, now with s light pullback toward yesterday's lows with that kind of divergence, you have a high probability / low risk trade and I'd expect the divergence to continue higher on such a move.

This is why the Russell didn't get as much done as smart money doesn't buy in to higher prices, they buy in to lower prices and sell in to higher prices.

 10 min UPRO, a serious timeframe and a lot of movement for such a long chart in the last 2-days, definitely looking good, now for the low risk entry.

 3x long QQQ 2 min

 The 5 min chart for the Q's could have done more today, this is where you see how much more it did yesterday, not to say today was negative in any way.

The 15 min chart also got a lot more done yesterday, but still looks great today, I was just hoping to see yesterday's kind of activity in 3C in today's price action, but that's a bit more difficult when the averages are popping above and below green, but not really pulling back to the lower end of the range.

Overall the QQQ 30 min is not your typical "bounce" timeframe, there's something serious going on here and I would not sleep well at night being full short like I was last week unless I didn't mind riding out a an upside correction.

As for leading indicators, you saw HYG's positive divergences today, that was pretty impressive, it's also leading the market by a bit like yesterday, but a pullback in the averages leaving HYG where it's at or higher would create a strong leading signal.

The same was pretty much true for most other leading indicators like sentiment which were closer to in line, but an improvement, HY credit which was in line and Yields are leading, but again, could be doing so stronger.

The SPX/RUT is giving the kind of longer term bounce signal that fits with 60 min positive divergences so I feel very confident we are going to see some pretty amazing upside volatility, but remember the big picture and what counter trend bounces are all about.

Like I've said so many times this week, my positions are going to be based on the signals and the high probability/LOW RISK trade, not probabilities alone or emotional fear/greed of missing a move, I want to be sure I can trust it so with that said, I'm still comfortable with current positioning which is 75% of a full position in UPRO , 50% of a full size in FAS, and speculative USO and QQQ November 22nd calls.

As the market shows me more, I'll increase my exposure.