There was no Dominant Price/Volume relationship today and that's a reflection of the averages not confirming as SPY/XLF did. However there were still some scattered positive signals, I entered partial positions in UPRO and FAS to account for what I believe will be some extra lateral base building.
Transports diverged hugely with industrials as the Dow was -.04% and Dow Trannies were +2.61%, an interesting positive divergence.
Also the averages were flat on the Day, SPX +0.16%, NDX +0.06%, only the R2K was up 1.17%, but I suspect it comes down and finished building out the shorter timeframes like SPY / XLf were doing in to lower intraday prices.
VIX futures were going negative on the 5 and 7 min charts very clearly and a bit further out, they move opposite the market averages...
Also note the major averages except RUT put in Doji Stars today, a bullish reversal candlestick, at the least a loss of downside momentum opening the door to a reversal. Also interestingly considering the VIX futures negative divegrence was VIX putting in a bearish Doji Star reversal candle on the close today.
Leading indicators weren't all that special today, HYG slightly outperformed the SPX, Credit was in line with prices, the market reverted to the mean with Yields which is a more neutral environment rather than bearish and the SPX/RUT Ratio is deeply inverted both longer term (base) and intraday.
Intraday, especially in to the close.
Of the 9 S&P sectors, 6 closed green with Industrials leading at +1.39% and Energy lagging at -1.26%. Of the 238 MS groups we follow, 181 of 238 closed green, much better intraday breadth than we have seen lately and there were no stealth slippage in breadth as I checked breadth indicators, they were flat to improving in certain area.
All of the averages are below important moving averages and important support, perfect for a volatility shakeout like the kind we see on the initial break of a H&S top.
I suspect we still have work to do, which is why I went with partial positions, but I believe I'll be adding to them and others in the next day or so, just as I thought I'd have some added today earlier in the day after waiting patiently for 4 days now.
We are not at the area in which I'd enter a call options trade, but I suspect we will see that in the next day or so. Honestly I can't wait to get back on the short side of the market, but we take what the market gives so for now, I think we can look for a deeply oversold breadth bounce like early August, although I doubt it looks the same.
That will do it for tonight, I have some family matters to attend to, but I'll see you in the morning.
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