Market Update

There are so many little things happening right now and building, it's hard to keep up with all of them. We just saw a sharp move in 5 year treasuries, yields are up which are a leading indicator.

 5 year yields green vs SPX red intraday

HYG (green) is leading the SPX which it would have ZERO reason to do in a risk off move.

Other leading indicators are responding as well. The Most Shorted Index is holding up much better than the market , the dogs of dogs, which is one of the breadth indications I saw last night that had improvement, stocks that are 1 or 2 standard deviations BELOW their 40-day moving average fell, showing these dogs are improving, also being seen in the MSI .

I've been very close to entering a full size URTY position (3x long IWM), I just saw (after I was considering URTY long), NANEX reporting a huge number of cancelled orders in the Russell 2000, the same thing reported yesterday market wide that has led to sharp upside reversals.

A number of the averages are also showing sharp intraday divergences which is more a timing issue right now being, as I showed earlier, many have long term chart positives out to 60 mins (See the IWM, URTY, SRTY 3C charts posted earlier).

A few examples, but note the rate of change in the 3C divergences in the timeframes we were specifically waiting on...

 SPY 2 min

UPRO 3x long SPY 2 min confirmation

UPRO 5 min, I'd like to see a new leading high made here to add to yesterday's UPRO long position.

XLF 2 min leading beyond yesterday's divegrence and sharper.

FAS 3x long Financials 5 min leading, again I'd like to see a little more of this intensity to add to the position started there yesterday.

 QQQ 5 min leading

TQQQ 3x long QQQ leading

IWM 5 min leading

SQQQ, confirmation in the inverse or 3x short QQQ on the 5 min

SPXU 3x short SPX leading negative on the 5 min

VXX Short term VIX futures leading negative on the 5 min, they move opposite the market.

So a lot is happening pretty quickly, this doesn't look like it will be the normal wider, "U" or "W" shaped base, but I want to try to hold out for a bit more.

The size of the base since the second and out to 60 min charts is now larger than the August base leading to the August rally, so this looks to be a pretty important area.