Market Update

Sorry for the delay, I've just been checking everything carefully.

We haven't taken any action, except I know some of you have taken some management action, closing some calls at gains or lowering exposure in certain areas.

It's still a bit difficult to tell what this is,  but last week you may recall me saying, I'd rather miss the move than get in on a sub-par base that will cuase me to lose sleep", of course I don't mean literally lose sleep, but figuratively. This is one of those bases thus far which is why I've kept long exposure to a minimum at this point. 

A pullback to create a "W" base looked to be on the table, even last night as the market saw ES down 20 points before the European rumors at 3 a.m. which is what changed everything, otherwise we may be very well have been headed toward that stronger "W" base, the kind you can trust. A "V" base is  like a parabolic move or like trying to build something tall on a foundation that has a "V" shape rather than a broad, flat "W" or round base, it's really no different.

 Again, this is the SPY 60 min chart showing the last substantial base in early August and the support that the shape of the base gives compared to the very tight "V" shaped "Event" rather than reversal process. We don't see these "V" shaped bases often and there's a reason, they typically don't hold well.

One potential move is a "V" shaped downside reversal just like a parabolic move up that ends with just as sharp a parabolic move down.

Or perhaps we make more of a rounding top/pullback area as drawn in yellow. There are still a lot of possibilities based on the charts we have. Whatever happens from here, there are a few constants I think you can count on.

A "W" shaped base would be preferable and be able to do the job that the 3C charts suggest is trying to be done, this "V" shape will be much harder to support that kind of move.

 Here's the same in the QQQ...

Now, the charts...

I'm going to use the SPY as a broad example that pretty much covers all of the averages with a few small details here or there a bit different, but not much.

 Intraday the SPY 1 min looks a bit like a more rounding Igloo top, this may have changed by the time I captured, uploaded and write this, but if so, note the distribution at the chimney area as well.

 We have migration of the divergence, this is a negative SPY 2 min chart. Usually if the market is just consolidating sideways from a gap up, a 1 min divergence is enough, when a 2 min is added the probabilities of a pullback go way up short term.

 The 3 min has migration to leading negative as well as a relative negative, it almost looks like this is the area the SPY is suppose to turn back down , almost as if this were the neckline of the larger base.

And the 5 min chart shows the same thing, this is pretty serious out on a 5 min chart.

However, make no mistake, the charts are telling us, however we get there, this market is going higher so keep that in mind.

Take the SPY 15 min for example. I can show you these in every average and past 15 min so this  is VERY high probability that we see additional upside gains, the kind I tried to express last week in anchoring expectations. I DO NOT THINK THIS MOVE IS FALLING APART.

 UPRO 3X LONG SPX 5 MIN IS ALSO SHOWING THE SAME KIND OF PULLBACK DIVERGENCE AS SPY 5 MIN.

And at 10 minutes,  again make no mistake, probabilities are VERY high that we make a much higher move, it's just very short term how do we get there, I still lean to a pullback and broader, stronger base.

 While we are at it and discussing things you can count on, no matter what the upside move, no matter how powerful, we will be making a new lower low after as this 4 hour SPY chart shows, the highest probabilities,

QQQ

 At 5 min the QQQ is showing the same thing, as if we should be pulling back in the area.

Even out to 10 min, make no mistake though, after that this is very positive and we should absolutely see much higher moves, again, it's how we get there and how we want to play that.

TQQ the 3x long QQQ 5 min chart looks the same as SPY and QQQ.

And SQQ, 3x short QQQ is the mirror opposite on the 5 min chart suggesting a pop up in SQQQ and down in the broader averages, again in my view if this keeps building the way it's going, it is to build a stronger base and finish a much stronger upside move followed by a bear market lower low.

IWM

 URTY, 3x long IWM 5 min is lagging as well, suggesting the same thing, a pullback.

Even at 10 min just like the QQQ 10 min chart.

Even at 15 min,  again make no mistake, after that it is VERY strong. 

So I'm still trying to see if we are on track as we were yesterday and overnight until an unsubstantiated rumor moved the market, a rumor that was later shot down.

Until we understand the short term probabilities, I'm loathe to just throw dice in the dark.