Quick Market Update

This is another one of those days that by the time I capture the charts I intend to upload and post, there's a slight change that makes them irrelevant which is not hard today with everything so flat right now.

However, this does look very much like the start of the Santa Rally reversal. There are numerous definitions of the Santa Rally from the month of December to the day after Christmas until New Years to the day before Christmas to the second day of New Years.

In any case, I have spotted substantial changes in character in all leading indicators on the 26th, which was also the last day of Window Dressing for Q4 and full year 2014, I suspect the Santa Rally that is seemingly a given in most technical traders minds will be used against them as I have laid out in the past, I think it's the perfect storm or in this case, Bull trap.

The SPX, NDX and Dow officially have all taken out all Santa Rally gains with the definition being the week of Christmas starting the day after through New Years, if you use the 23rd as a starting date, then the SPX and Dow have taken out all Santa Rally gains, this is what I suspect will be the ignition to a downside move.

 NDX has taken out all gains since the 26th.

SPX has taken out all gains since just about the 23rd.

And the Dow has taken out all gains since the 23rd.

Whatever the details, and my theory of using the Santa Claus Rally against traders is based on Mass Psychology, I don't think there's any escaping the reality below no matter what the details in getting there.

SPY with our forecasted cycle from 12/12 with a deep leading negative divegrence, 10 min.

The same divergences can be seen in ES/SPX futures on the 30 min chart with the same accumulation area and same distribution and leading negative divegrence, so again, whatever the details of how we get there, I don't think there's much of an argument as to whether we get there.

This is one of those times I think it's best to look at the bigger picture and not worry so much about the intraday or day to day myopic view of the market, you'll miss the forest for the trees as I did in chasing a small bounce in AAPL hoping to get better short positioning as AAPL broke down and lost -45% in 8 months.

The USD/JPY is still in line with the downside. In fact the $USDX closed the gap on the leading negative divegrence overnight and is in line or confirming the downside, but from that place, it's not hard to put in a small positive divergence and as I said before, Wall St. will never make this obvious or easy, which is why I think one of the greatest traders of all time, Jesse Livermore said, "Give me time, not timing", meaning focus on the big picture and sit still on it, rather than reacting to every "Jot and title" in the market.

Since hitting a low of -1150 this morning in the NYSE TICK,

there has been a subtle uptrend in TICK, although barely crossing +500, it's still holding the market in place and causing rather dull trade, however again, it's the bigger picture I think we need to focus on.

This is my custom TICK indicator vs the SPX, note the change in the upside TICK as the move progresses and how shallow the upside TICK is the further we move to the right since the 12th.

The USD/JPY is really the last tractor beam left, but I did notice some Leading Indicators that were more neutral today than yesterday, HYG is a bit neutral, TLT although leading is losing some intraday ground. VXX is leading, but also looks to be in danger of losing some ground.

I don't think any of this changes the two SPY/ES charts above, it's the psychological games and jiggles meant to make you question your positions. This is why I think it is essential to focus on the forecast, the big picture and use the jiggles to your advantage.

I'll have to put out some very specific updates to keep up with the market as it is so flat here that it can quickly shift in either direction, but again the highest probability resolution is right above on the SPY and ES chart.

I'll also try to add some additional asset/trade ideas.