Market Update

As I've said the last few days, "I'm very comfortable short here".

As for yesterday's intraday divergence that I talked about in more detail yesterday, it's not really seeming like a high probability right now of creating an intraday "W" base, but it's something I'm watching for.

Just after the A.M. Update, the divergences in TF and NQ Russell and NASDAQ Futures) dumped on the open, ES held up a bit better. The $USD flattened out from its overnight rising trend and the Yen flattened out from its overnight declining trend with the USD/JPY also flattening out and 10 year bonds showing a small upside reversal , again, all right on the open.

 NQ dump on the open-NASDAQ Futures

TF dump on the open.

Yesterday's SPY 1 min positive which is negative both in to yesterday's close and this morning's open would have to show a positive divegrence in to a decline toward the white trendline, I'm not so sure that this is a very high probability as I explained in last yesterday's post, Dynamics of Intraday Trade "a 1 min divergence alone without a 2 min is a 50/50 chance of consolidation in the area or a move (depending on the type of divergence), it seems probable that a consolidation or holding pattern in front of election results as well as tomorrow's ECB, are a bit more likely than an intraday bounce attempt, especially when it was there on the open from overnight trade and immediately faded.

 SPY 2 min, it seems the action on Friday which was the close of the fiscal year for Mutual Funds, was the most significant near term event with 3C distribution at the area.

 For a 1-day Key Reversal in SPY, it would need a close at $200.05.

The way the 3 min chart is moving, nearing a new leading negative low, it just doesn't seem likely that any kind of base for an intraday bounce or otherwise is probable, but it is something I'd like to rule out first and we are moving closer and closer to that end.

 QQQ 1 min which never did much more yesterday than in line intraday, leading negative in context, also non-confirmation on the open which quickly faded.

I think one thing people are overlooking with the Republican win is the fact that this puts the F_E_D on very thin ice and political considerations regarding the F_E_D's mandate and powers are now on the table as Republicans have had it in for the F_E_D for years, but they've been blocked by Democrats. There are a number of Republicans that want to audit the F_E_D, have them explain their decisions, re-write their mandate, taking away certain powers to downright ending the F_E_D so this is an important event for the F_E_D and I don't think that has quite hit the market just yet.

Does anyone find an irony in the fact Republicans were expected to take the Senate as they did last night and the F_E_D ended QE just a week before? Think about all of the prior dates they said they'd end QE, the first being QE would be over by the start of 2014...

 The Q's would have to close at $100.66 for a Key 1-day reversal.

 The 2 min chart was nothing better than in line intraday and leading negative on context.

 Meanwhile the 3 min chart continues to reach for new leading negative lows

While the entire cycle from stage 1 base/accumulation to stage 2 mark up to stage 3 top and "HF" head fake" is not looking good here with a new leading negative divegrence that has added this much (between the red hash lines) this morning alone.

 IWM's positive 1 min yesterday went negative in to the close and certainly at this morning's gap up open.

There was no positive at the 2 min, it is in leading negative position.

The 3 min IWM

And again the cycle from stage 1 to stage 3 with a leading negative at a new low.

I'm going to try to rule out as many scenarios as possible and come up with the most likely, but as I said before, I'M VERY COMFORTABLE SHORT HERE".