The selling this morning hasn't been ginger bread transactions like many of the upside moves we have seen with no 3C support and no market breadth support, yesterday was a sterling example.
Today the TICK hasn't risen above +500, in fact I believe it has been below +500 the entire morning, but on the downside,- 100 is common and down to -1450, heavy selling proved by internals.
It looks to me like we are going to see a break from that selling for a bit, perhaps a counter trend bounce off this morning's actions, here's why...
SPY distribution from yesterday...
QQQ distribution from yesterday
IWM distribution from yesterday in what looks like a textbook head fake move, these are almost always seen just before a trend reversal, literally just before,
However this morning on the 1 min chart the very shape of SPY price alone had me thinking there was a positive divegrence brewing, it's a much shorter 1 min divergence while the 3 min above is still leading negative, but it still looks like it is preparing for a counter trend correction which is not surprising with the market this ugly this early.
The Q's have moved to in line on a shorter 1 min intraday chart, while the larger divergence from yesterday remains intact,
but as always, any new divergence starts on the earliest timeframe. I suspect this is just a bit of relief.
And the IWM is moving to in line, not a positive divegrence, but not the same level of distribution as yesterday.
Interestingly yesterday's Dominant P/V relationship as well as MS and S&P sectors all suggested an overbought condition from yesterday alone-see last night's Daily Wrap.
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