Market Update

You've already seen the SPX/RUT charts and VIX Inversion, that longer term chart is still bullish, very much so, it has been the near term charts that have been looking like we pullback and create a base that's more stable than a sharp "V" which is typical of counter trend rallies in a bear market, but not of really strong moves that change sentiment, which is what I suspect this one is based on the size of the base over time and divergence, it's just that launching pad area is such a sharp "V", it just doesn't fit with the rest of what's there.

In any case, here's what has happened so far today and while you're looking at it, recall last night's overwhelming 1-day overbought conditions.

 SPX/RUT Ratio showing the divergence in to the base area and the recent divergence suggesting a wider "W" base on a pullback is likely.

Intraday, more specific to today, you can see the clear deterioration here, continuing from yesterday.

The SPY 1 min, my how fast things went south there, but it's still a 1 min chart.

 There's clear migration of the divergence so it's getting stronger as the 2 min chart shows

As well as the 3 min leading negative

The issue is at this point is what to do with this beyond a fade trade as the 15 min chart and some others even stronger are still VERY much positive like you see above. This is not where I'd be entering my core shorts for the next lower low leg down yet. Perhaps a wider base as I have anticipated, perhaps not, that's what we are looking for.

 QQQ 1 min the same very ugly intraday distribution, again still just a 1 min chart

migration to the 2 min chart

And to some degree, migration all the way out to 5 mins, so this could get worse as mentioned earlier if the market holds up long enough.

Again, as mentioned there are some very strong charts that have been building a strong divegrence most of this month like this QQQ 60 min so we have to keep this in mind as this really is still the dominant swing chart.

IWM 1 min

3 min

and again, a strong 15 min.

So for me, it's still time to be patient and look for the clues that tell us how this resolves. If it looks like a pullback to a wider base, we'll see that as price pulls back, the charts should start going positive, that would be a buy opportunity for a swing+ trade. This could be a sharp gap fill, it could be a lot, it's very early and so far quite extreme.