Time to post these again because as of yesterday, it was really only the 30 min chart that was still in line and that is changing today.
Also we'll take a quick look at the targets mentioned last week and re-posted this week,
Revisiting Market Targets... and how we're coming along there.
You may recall yesterday we talked about a "Crazy Ivan" shakeout (
Index Futures) based on the triangle that formed in all of the major averages, this morning we have that Crazy Ivan move. I also have been hesitant to add to any further positions other than a few (3) specifically opened for this move, all short exposure, until we have a little more of a solid signal as
the very short term trade in my view was going to be noisy, but noisy for a reason, not just randomness; overnight through early trade today we witnessed some of that noise. I don't want to load up the truck until we are clear of that kind of trade as it really is very speculative, very unpredictable and very short in duration meaning options would be the tool of choice, but for most people staying on top of moves as fast as some of these make options unsuitable, thus patience really looks like the best strategy so long as things keep moving in the direction we expect and need them to.
You already saw the 1 min SPY chart of ZERO confirmation on the open and the proceeding sell-off, we are pretty close to in line intraday, but there's nothing of great interest here other than the open.
This is the 3 min chart in the stage 3 top of the move up we saw coming and published targets for on April 11th, there's a repost of that article linked above, here it is again...
Index Futures
The 3 min chart is leading negative overall, this is the dominant trend for the 3 min chart, but as far as near term trade/noise, we need to look at the intraday view which is largely unchanged from yesterday.
This is the same 3 min SPY chart on an intraday move, the trade action on Tuesday looked like a head fake move, either way, there was distribution in to the move and that's what matters, but as we saw yesterday, there's a relative positive divegrence that has been forming, most of it at the triangle area from yesterday which is why I suspected a head fake move below the triangle and later posted the "Crazy Ivan" shakeout expectations. Whether this is a definitive Crazy Ivan that gets us to where we need to be or not is still in the air a bit as there's still 1 average that hasn't hit its target which we'll look at in a minute,
this is not a strong divergence by any means however it is noisy.
SPY 5 min chart also has a relative positive divergence short term basically since yesterday. The 10 min chart above shows the move off the April 11th area/base,
the leading negative 10 min chart is an important signal with price where it is in a lateral range based on the triangle from yesterday and noise both below and above it. We are currently above the apex of the triangle after being below it earlier this morning, above it on the open and below it yesterday, that's a lot of noise, not the kind of trend that we want to catch.
This is the 15 min chart of that same April 11th-ish bounce, the yellow line represents that area we expected a head fake move and got it the next day, signals were all distributive on the move except the 30 min chart which remained
in line with price, this was my one bone of contention with loading up positions as the 60 min chart is clearly negative, the 30 min needs to link the intermediate timeframes like 10-15 min to that 60 min chart.
This is the 30 min chart with a positive divegrence at the base area around April 11th, we now have a move
away from price/3c trend confirmation to a negative divegrence that picked up yesterday afternoon.
Keep in mind the accumulation zone from around April 11th and the distribution zone, we want a bigger distribution signal , but we have at least a start now. This is why some of the short term signals like the 3 min chart above make sense and why I think patience makes sense, the 30 min chart needs some time for the divergence to sharpen, I'm not saying days or weeks, it has happened in a day, but the intraday charts and their signals seem to be the "time" that we will see until they go south and the 30 min moves to a sharper negative divegrence,
this is when I want to load up.
And the 60 min chart, as I said, this is clearly leading negative on a very important timeframes, the entire February cycle is distributed, in certain averages like the NASDAQ 100, pretty much the entire April cycle has been retraced as al of the averages have entered stage 4 for the February cycle (with the NDX's stage 4 decline retracing the entire move already).
As for the upside targets posted April 11th which was the absolute low before this move started, there were two areas I thought needed to be taken out, 1 was the actual downtrend as defined by trendlines, that was the easier of the two targets, but for the hardcore Dow theorists, the chain of lower lows and lower highs would also have to be broken and that's why the second target (higher up) was this former pivot high, that would break the lower lows/lower highs, the NASDAQ 100 did that this morning on the open, granted usually these moves are a bit more convincing than just a brief move above the pivot on a gap up that is immediately faded, but technically it was taken out, I do think there's a good probability that it will look a bit more convincing, otherwise what's the point?
As mentioned, the SPX and Dow already took out both targets, the R2K is the only one remaining.
This is the pivot high that I had drawn my "target area" guestimate on April 11th, I think this is still likely and until we get that move or very good divergences through all timeframes including the 30 min and the 1-5 min charts, I think patience is really the best course of action.
I will leave the SRTY (3x short IWM) long position open as the drawdown there is limited in my view and the QQQ May $87 Puts as well as the VXX May $43 calls have more than enough time in my view.
