Market Update

There are still some very tight charts in the intraday region, mostly 1 min, for example...

 QQQ 1 min with a positive divergence, even though on a very short time frame.

At QQQ 2 min we have in line so the positive is very small, very weak, likely some steering divergence .

However there's confirmation in the 1 min Index Futures

 When volatility picks up, it's not uncommon for weak divergences to be run over. For instance there was a positive divergence in NASDAQ 100 futures around 3 a.m., that's around the same time it looked like USD/JPY had bottomed for the night, it went on to make a lower low just before the cash open and this divergence was run over, but right now there's a similar positive divergence in NQ 1 min just like QQQ 1 min.

These are the jots and tittles I would not get too carried away with, like I said, the market is never going to hand you anything on a plate, they'll cause doubt and try to shake you out, this is why it's important to have an edge, to have multiple time frame and multiple asset confirmation so you can stay the course rather than reacting emotionally to every market jiggle.

 The 1 min IWM is "close" to in line, but also has a slight positive divergence.

However TF/Russell 2000 futures 1 min is in line with price action, not confirming any positive divergence. When even talking about such small divergences, we elevate them way beyond meaning, I'm just trying to keep you informed, but don't mistake these as being anything along the lines of the charts and case we have built from objective evidence in much stronger time frames and in many more assets.

IWM 2 min looks just like TF, in line with the downside.

SPY 1 min looks to be close to in line.

As does the 2 min.

ES (SPX futures)...

 has the same 3 a.m. positive when the USD/JPY looked like it had maybe hit a low for the early morning session, that divergence, after about an hour and a half of upside bounce, gave way as well and right now is pretty darn close to in line or 3C/Price trend confirmation.

One of the indicators I was looking at earlier and thinking, "No wonder the market has been relatively flat since the open:, is our custom SPX:RUT Ratio, it had been confirming lateral trend price action and only recently broke below that range.

Likewise, the uptrend mentioned earlier in NYSE intraday TICK, which didn't move much beyond +750 broke its channel and saw a heavy spate of selling with a -1200 print.

The more important Index Futures are on the longer charts, which I've gone over numerous times, there's not much that is changing except the 5 min chart which I'd prefer to see lined up with negatives, but it has been much more fluid than normal while the longer/stronger 15, 30, 60 min charts and beyond have shown us the real weakness in the market.

As for those 5 min charts are now looking a lot more like I had expected them to look...

 ES 5min. I don't think I need to comment on the chart.

NQ 5 min

TF 5 min

These are pretty clear and very negative.

Even more important, especially for the Russell 2000 / IWM, the 7 min charts.

While NQ is giving the kind of divergence that supports the downside move, TF is giving the kind of divergence that is screaming that a downside move is coming and will be quite a bit stronger than we have seen,  ultimately to move to the next phase of the forecast and to justify the entire point of a head fake move like the one above the IWM's 6 week range, we have to move back in to or below the range, that's where the bulls are trapped and the momentum to the downside picks up, we are getting evidence that what we suspected on 12/12 , the means working toward the end, is within reach.

 NQ 7 min leading negative and price has moved to the leading negative divergence, now confirmation, but just as this leading negative pulled price toward it to the downside for the NASDAQ 100 futures, so does the Russell 2000 futures give us a hint that the exact same is on the verge of occurring and I don't mean this -.54% IWM move of today (note the Q's which were pulled to the negative leading divergence are down -.75% today thus far).

This is the TF/Russell 2000 FUTURES with a leading negative that should see price pulled right to the 3C divegrence like NQ above. THIS IS THE TRIGGER TO SET THE NEXT STAGE OF OUR FORECAST IN TO MOTION.

I think one of the few short term questions right now is USD/JPY (I'll double check on the other 3 lever assets as well, but again, it's short term subterfuge, distraction, misdirection.

 This USD/JPY 3C chart doesn't have an obvious divergence,  that's sort of the point, yesterday it did have an obvious negative divergence and while the pairs are the most difficult to get signals from, especially in any time frame longer than 1 min, I use the individual currency futures to make calls on the pairs like yesterday's $USDX deep negative divergence. The USD/JPY started dropping on Yen strength, but as I said last night in the 8:30 post, USD/JPY Follow Up

"USD/JPY has now retraced all gains from the 9:30 a.m. opening ramp, lifting the market from gap lows and a.m. lows.

I suspect we have more downside to go as the $USDX divegrence is still very strong and the $USDX has barely given up any ground relative to the size of the divegrence, not including the longer term, larger picture 30/60 min divergences."

The point being we had given back all of the cash market gains in USD/JPY by 8:30 on the Yen moving up alone, but the big divegrence was the $USDX negative, I suspected it would kick in and we'd see an even sharper decline in the FX pair and we did.

At "A" was the 8:30 post above in which we had retraced all of the cash ramp open gains in USD/JPY by the Yen alone, there was still a VERY negative $USDX that still hadn't kicked in, that happened overnight at "B" and in to today, you can see the $USD's negative divergence was quite strong and it did as expected pushing the pair much lower to lows we haven't seen since mid December.

 This is the correlation between USD/JPY (red/green candlesticks) vs ES (purple), note the sharp decline as ES finally gave up the gains it was holding in a negative divergence in a very flat range later in the night, posted here, Futures Update which was actually pretty late, 1 a.m. EDT.

Looking at the single currency futures...

 The $USDX is nearly perfectly in line, but all it needs to do is turn sideways and it can develop a divegrence strong enough to bounce it. The intraday strength that has recently built in the USD/JPY is not because of the $USDX, it's the Yen.

Note how the Yen has given up some ground, pushing USD/JPY a bit higher since the lows around 10 a.m. today, the same time the Yen started losing ground although $USD hasn't gained any yet, but there's a decent chance it does near term.

This is the USDX 5 min chart, nearly perfectly in line like the 1 min, but again the short term problem for more USD/JPY downside rests with the Yen...

Note the positive (white) pushing the Yen higher (USD/JPY lower) and the more recent negative which should help push the USD/JPY higher.

At 7 mins, everything is as it should be and the USD/JPY should continue its downside.

Just like last night, the USD/JPY really didn't kick in to the downside until the $USDX's negative divegrence was fulfilled, the real downside in the pair won't kick in until the 30/60 min positive Yen/negative $USD kicks in, which is the highest probability, but between now and then, I expect a little USD/JPY strength, thus likely some market bounce with it.

I'm trying to anchor expectations so that you don't get lost in the lines or spend too much energy looking at the trees rather than the forest.

I hope it helps.