Market Update

Still looking like a head fake Chimney or what is more commonly known as a bull trap.

 QQQ leading at a new low, most of that occurred in the space of 30 minutes. This would be the typical confirmation of a head fake move we'd be looking for, it just so happens it's in the right place , see the previous post showing yesterday's rounding top/igloo/chimney chart drew out...

QQQ trend from accumulation mid-October (and before) to mark up with 3C confirmation at the green arrows and a leading negative position where the rounding top is, which is also about the same place as the break of the trend line...

QQQ trendline break

It didn't take long for the divergence to migrate to the next longest chart (2 min) which shows a strengthening divergence. In simple terms, the distribution in to a head fake move. Since capturing this chart it has made another new leading low.

IWM also saw the same type of leading negative divegrence around the same time, I like to see multiple asset confirmation as well as multiple timeframe confirmation.

And the Igloo/Chimney that it seemed they were trying to get to yesterday whether it be the SPX moving averages, green on the month or a simple bull trap / reversal.

It's still up in the air as to what happens at the October lows. The 60 min SPY is confirming the downtrend as 3C makes lower lows with price until mid October with a divergence that just made it to the 60 min chart followed by confirmation with 3C higher highs with price right about to the level of the rounding top area and a leading negative divergence at the same 60 min chart now.

The one thing I'm not crazy about is HYG's 3C divegrence from yesterday is still in place, this may be a remnant that dissipates, we'll have to watch it.

This is an index of HY Credit I don't have access to with 3C charts, but it shows the utter failure of credit markets to confirm today's move, making it look even more like the typical "Chimney" head fake.

ZERO HY Credit confirmation, this is one of the best leading indicators among asset classes, thus the old saying, "Credit leads, stocks follow".