General Market Update

Since everyone pretty much knows what we have been looking for and now we are getting it, I don't want to clog up your inbox with a bunch of posts just to let you know I'm here and you are not missing out on something big that is happening.

Selling in to strength is a process, it's been underway, it looks to be continuing. The one question I have is how aggressively? Earlier in the month we had a base set up for a true oversold bounce that didn't last 2 days before aggressively being sold.

I'll post alerts on the usual things, intraday moves that look like they could be tradable, any additional information, but for the most part we are on the track of expectations and we just need to be patient and let it play out and when we are in the right place, we'll take action, but as I said, I don't want to just send out a bunch of posts that aren't really anything unexpected or things we've already discussed before. I'll send you anything that is standing out, anything that is truly material.

As for the major averages, we are right where we expected to be or at least where we expected to be heading...

 SPY daily- the top trendline across the chart is the top of the Broadening top and the yellow areas are two head fake moves or failed breakouts that would tell technical traders that the tp formation is negatived, luring them in to going long on confirmation breakout signals, creating bull traps that promptly dumped.

To the right is the bearish "Descending Triangle" which technical traders would expect to break to the downside, as we've posted this week, we are looking for a break above the triangle first, part of our bounce, part of a head fake move. In fact out earliest minimum targets were for a move above the January highs which we are approaching.

So this is what we expected to see (I covered this scenario extensively yesterday), so nothing really exciting or unexpected here.


The Q's have the same larger Broadening top and the same Descending Triangle and the same break out above the triangle, again, as expected.

 Remember that IWM range and the Crazy Ivan shakeout? The important move for a bearish, larger move is the IWM below the range now that it head faked above and popped back in. Stops should be lined up just below the range so we'll also be looking for a move in the IWM below the area of $114-ish.

 Transports breaking a nearly 2 year trend up at the first yellow box, a Crazy Ivan with a false or failed breakout above the range at the second yellow box and a flag-like price pattern, I don't have a specific target here, but it would be well within our concepts if we saw a move above the flag's top resistance trendline.

As for price action, I'll use the Q's as an example...

 The intraday chart stays in line long enough to allow higher prices and at those higher prices we see negative 3C activity just as expected (selling in to price strength).

This is accruing or migrating to longer charts as we have seen, in this case the 2 min chart. This isn't a screaming signal as of yet, it's just evidence of our expectations coming true.

Here's a broader perspective of 3C activity on a 5 min chart showing several different areas including the last failed base area so we still have some work to do, but we are progressing on track.

I noticed some dislocation in HYG this morning, this will be an important early warning signal. It still has a base large enough to continue to act as a lever and support for the market, however there are some dents in the armor and this is one of the best early warning leading indicators in either direction.

The HYG 2 min chart as you see is building a stronger negative divegrence, but it is not yet at the point in which it has used up all of the gas in the tank so again, the process and moves expected are underway and expectations of how the market would behave during this period are thus far confirmed.

So I'm not going to post every jot and tittle intraday that really doesn't mean anything, I'd rather and I think you'd rather I spend the time looking for important things and opportunities.

Basically put, so far so good.