A.M. Update

After a quick look around, which I'm not overly fond of during the first hour or so of trade as there's a lot of game playing going on with limit and stop orders as well as the occasional nonsense from NYSE specialists, I see VXX and VIX outperforming again today, again it's very early, but that's what's there. TLT has pulled back a bit, I'll be looking at TLT longer term soon as a few more charts develop and may have a new forecast there, but for now the 60 min chart is still in line with its uptrend and I see some interesting things in High Yield Credit and HYG specifically that are amazingly well correlated to the SPY and broader market in a more general sense. I've also added a few big picture charts because I don't want to be too myopic and lose site of all of the timeframes or get "Lost in the lines".

Since I noticed this first, HYG and the averages...

 HYG's opening this morning on an intraday 1 min chart, as I don't expect you to recall what it looked like several charts below, I'll just add them here.

The SPY which has very little to do with High Yield corporate credit from a 3C confirmation viewpoint, looks remarkably similar on the open.

As do...

 The IWM 1 min on the opening action...

 HYG saw some steering divergences in the 1 min chart yesterday at the market's lows, it seemed like a quick rescue as HYG put in a small positive divegrence seen above, however the 2 min chart looks worse as it is leading negative.

Not far off from the SPY 2 min

 SPY 2 min on the open leading negative similar to HYG.

 QQQ with a wider view leading negative. I tend to look at these two divergences as part 1 and part 2 of the Crazy Ivan move below and above the IWM's 6 week range which didn't move at all.

I can't recall the exact percentage, it depended on what day, Thursday or Friday the 12th, but the range was somewhere around +.10 to +.38% movement over the entire 6 trading week period. The move below which was the first trading day after we forecast a head fake move above weakness (Friday the 12th) on the following Monday on the move below was the first potential of the forecast being fulfilled in creating a potential Crazy Ivan shakeout with the bottom #1 already hit and only the head fake move forecast at #2 completing both the Crazy Ivan shakeout and the forecast head fake move. The point is, I look at the divergences above as either leading to the break at 1 or the break at 2 which makes the QQQ chart above this make sense as to what was happening in underlying trade that led us to our expectations and forecast and continue to.

The IWM 2 min is also deeply leading negative as HYG's 2 min chart is moving.


 HYG with accumulation as early as Friday the 12th with a comment, "There's only 1 reason to accumulate HYG" and this being part of the reason the forecast developed as it did with the larger reason being based not on evidence we had in hand yet, but the Mass Psychology concept of a head fake move, especially in to the F_O_M_C and the end of year/Santa Claus rally.

 HYG 5 min is leading negative, again the positive divegrence is there, but looks much smaller as you have to remember the divergence has to be of significant size to show up on the longer charts, it was not significant enough early on Friday to show up here, but was in place starting Monday and easily by Tuesday, the day before the F_O_M_C which is "part" of the reason I suspected the F_O_M_C, despite it not being a dovish/bullish policy statement, just more confusion, acted as a perfect cover for the move, something that can be put in to a 30 second soundbite on CNBC. Again, unless there's a much greater deal of funny business going on behind the scenes and much further ahead of time, but I doubt it in this case as there were 3 voting members dissenting, not a slam dunk for Yellen.

 The HYG 10 min chart shows the concept I was just talking about above even more clearly as a divegrence would have to be even stronger to show up here  as it did on the 16th, so it shows up in smaller size and later as it has built up since Friday.

 Again looking at the QQQ 3 min you can see the head fake / stop run below the range pulling in shorts who will later be squeezed and accumulation at a break BELOW support, the opposite of what most technical traders believe happens and you see the negative divegrence immediately after the F_O_M_C which as usual moves from the weaker relative form to the stronger leading form.

 To put things in some perspective (although maybe a bit redundant, the QQ 10 min chart coming in to all of this and in a horrible spot right now,  this is what we use to determine whether a move is real and confirmed or a head fake, although the longer charts and their signals already give us a strong probability of what to expect, this confirms a head fake, at both breaks of the Crazy Ivan.

 QQQ 15, again as I pointed out yesterday, Tech and the NASDAQ 100 in general look as of now to have the worst relative strength on the 3C charts. For this reason, in entering any new short position or adding to (assuming it's a broad market ETF), I'd favor QQQ (or QID or SQQQ long) in addition to Tech.

 IWM 3 min continues to dig deeper leading negative

IWM 5 min also divergent and looking worse.

This was HYG's early underperformance of SPX (green)

 The HYG divergences are advanced notice of their probable moves, but the actual mechanism that causes them to lead is their price and lagging here is not good for the overall market,

On a slightly longer timeframe you can see how an HYG divergence with SPX led to the previous week's worst performance in 2.5 to 3 years depending on the average. If you look close at the lows, you can even see HYG leading the SPX to the upside, already making a move higher as SPX is yet to find the bottom.

 And over a longer period, showing the bigger picture, HYG vs SPX and every divergence sending SPX lower with the current the worst.

 Here's some of the VXX outperformance on a relative basis vs the SPX (prices in SPX-green- inverted to show the correlation and relative performance).

Spot VIX was doing the same.

PIMCO's HY Fund, leading at the lows and leading worse at the highs, again you can see what happened last time it led the market in to a divegrence, the worst week in 3 years.

Although TLT is down today, the 30 year yield and it's relationship with the SPX as a leading indicator again is near flawless in forecasting. And once again, easily the worst divegrence by far.

Since last Friday, TICK hasn't trended other than lateral and in a fairly tight range, mostly around +/- 750.

This data is a bit more clear on my custom NYSE TICK Indicator below vs SPY...

Note the change in intraday breadth working in to the F_O_M_C where our move got it's legs and the intraday breadth TREND since the 17th (F_O_M_C Wednesday)...

Just about everything is pointing in the same direction.