All of these charts were captured around 11 a.m. to about 12 p.m. today (Wednesday, April 9 2014) so some of the intraday charts or shorter term are going to look different, but the market updates will keep you up to speed, we are really interested in the big picture any way as well as concepts we can pick out and use to our advantage.
This is the trend of the 1 min chart, we usually use this for intraday signals, but there's value in the trend as well. At "
A" we have a clear distribution period (red arrow) through the later half of the stage 3 top's range. At
1 there's a small H&S price formation (whether it's a true H&S or not doesn't matter as few traders know how to verify the price pattern or bother to, thus you can see a micro view of how Wall Street uses Technical Analysis against traders and why. The first "
HF" or head fake move is a break below the neckline of that H&S top-looking price pattern, that's where traders will short the pattern as the break of the neckline represents confirmation to them, this is why the get shaken out so often right here. As the shorts enter and price moves against them their stops are usually right above the neckline which by T.A. standards should serve as resistance, once broken there's a mini short squeeze as they cover and that gives the market enough momentum to make a higher high that serves as a larger head fake move above the stage 3 range which pulls in longs buying breakout confirmation,
another head fake, another trap.
These head fake moves are used to create positioning and momentum, look at the downside price momentum on the smaller first HF and then the downside price momentum on the larger second HF,
if you haven't already I encourage you to read the two articles I wrote about head fake moves which are always linked at the top right side of the members' site, you'll find there's a lot of meaning in seemingly meaningless moves or deception in those moves which after some time becomes very predictable.
I highlighted April 4th because it was after the op-ex pin (weeklies) was lifted around 2 pm (as usual) that we saw the first signs of what this week would look like, a base built early in the week and then upside which we have already seen even if we end up with a larger base or nothing else. The white box around late Friday through present (at the time the chart was captured) shows the underlying trend of accumulation in to the release of the F_E_D minutes today.
This is the intraday view of the 1 min chart, there was a negative divegrence, not a deep leading negative, it almost seemed like it was just holding the SPY from moving higher at each attempt, almost steering it in to a range. The day ended with a leading negative divegrence on this timeframe.
SPY 3 min shows distribution at several points, one happens to be the larger of the two head fake moves that received its momentum from a small short squeeze that was based on a head fake move, of course late last Friday afternoon the first positives started showing up giving us an idea that we'd see a base and upside rather than continued downside as the new week (this week) began. The far right red arrows are relative negative divergences, the weakest form and very small as well as a fast timeframe so they aren't that meaningful, but need to be watched for further development.
Again the accumulation area and 3C signals are outlined on the time-scale below.
The 5 min chart shows the same distribution at the same areas, the fact that the 5 min chart was signaling distribution at the head fake break higher is important because the 5 min timeframe is where we really start getting stronger institutional signals.
You can also see accumulation at
1 and some distribution in a weak relative negative divegrence, this is still very similar as of the close today.
The 5 min trend shows the entire February cycle from accumulation that started Jan. 27th through Feb. 6th, that's stage 1 "BASE". 3C moves with price confirming the price trend at stage 2 mark up and distribution at stage 3 top, note the depth of the leading negative divegrence,
this is proof of what we anticipated before the move even started, that it was to be used as a distributive move to set up momentum for the stage 4 decline which half of the market is already in (from the Feb cycle).
The 10 min chart goes back a bit further, but the Feb cycle is the defining feature on the chart, note the positive divegrence starting Jan. 27th, also that last head fake high mentioned above can be seen here as well so it was an effective move to draw in longs and create a bull trap, thus downside momentum.
Here we see a positive divegrence on the 8th, it actually started late on the 4th, but it wasn't strong enough to show up on such a strong timeframe until it was more well defined which is around the 8th.
If you take anything away from this chart it should be the usefulness of a head fake move in creating momentum, look at the fall after that head fake / failed breakout.
The 10 min trend... I marked where the accumulation for the Feb cycle would have been, the depth of the leading negative divegrence through the Feb. cycle is more proof that this was never meant to be anything more than a set up for stage 4 which is what we had predicted before the first point was made on the upside.
This is the 15 min chart scaled to recent action, again note the strength of the distribution at the head fake move, that was a significant amount of distribution to show up on a 15 min chart in such a small area, for the SPY there's no positive out this far, just in line status,
that continues through the close today.
A longer 15 min trend and the Feb cycle, again the stages are apparent, the range of stage 3 (top) and leading negative divergences through that area which are now at a new leading negative low, we should see a serious stage 4 decline shortly.
This is the full perspective of the 15 min chart, this gives you some idea of the trouble this market is in.
The 30 min chart is interesting because you may remember me talking about distribution in to Q4 December 2013 Window dressing, look at 3C after that and in the area.
Once again the Feb cycle is revealed for what it is, a large distributive event which looks to me like we will be moving in to a primary downtrend, even though we already have averages like the Q's and IWM in downtrends, they are not primary yet.
The 60 min chart with the last two areas of any serious accumulation to the far left and the Q4 window dressing distribution again, you might even go back to the 23rd of December , in and around that area when we were noticing odd distribution at window dressing for the full year as well as Q4, the market never recovered after that as you can see and the Feb trend or cycle is truly seen for what it is.
This is why I can't put any serious contemplation in to this market moving higher (in any meaningful way) and why at this point any price strength should be considered as a gift to short in to.
The 4 hour chart is one of the strongest, I think it speaks for itself.
And the daily chart with Money Stream (similar to 3C in what it does) below in light blue, both indicators showing massive distribution.
On a 5 day chart note how small the 2007 distribution was compared to now and how bad the trend down was after the 2007 top, just imagine what we are facing on the downside now with a divergence this much worse and a totally different indicator, Money Stream confirming the same.
2014 shows particular weakness.
Well there's a look at the multiple timeframes of the SPY. As you can probably tell, there's not much I can imagine that will save this market and the multiple timeframe analysis is telling us that everything is lining up for what we might term, "The perfect storm".
