General Market Update

I didn't call out a fade trade on the afternoon parabolic move not because I think this parabolic move is any different than others, none of which I trust, even if we are to make additional gains which according to our minimum forecast target we are, it should see some kind of retracement. It was the time of day, the closing print and the psychological process of that closing print... in essence we got what we've been looking for in this "bounce" set-up... movement  which is where we find good information.

Ten minutes after our first head's up, Parabolic Moves-Quick Market Update early warning signal from the intraday NYSE TICK, Like This...,

 ...the market hit the intraday highs.

 This is what the TICK looked like in to the close and the SPY...

From parabolic up to flat, with a good 10 minutes of early warning. In some cases, this one of the fastest heads up signals you can get to a good fade trade off.

As for the SPY, last week our minimum upside target was the January intraday highs (white trend line). Let me remind you that this was offered as a minimum target and this week with the "Descending Triangle" (bearish price pattern), the upside breakout was the highest probability as it serves as a head fake move.

Earlier today and every so often I mention that the lesson I have had to learn and re-learn is that market moves are extreme by design, they need to be to move sentiment/emotion which is the driving force behind most price moves. I think my example posted earlier today was "Whatever may seem reasonable as a target or timeframe, you can usually safely double or triple that" because the market doesn't get positional movement (buying, stopping out, shorting, covering, etc.) without touching an emotional nerve in traders that drives them to make decisions based on emotion. I'm not saying that every decision based on emotion turns out to be the wrong decision; however I would  say that over the long haul and numerous decisions, you are far better served by making decisions based on objective evidence as I see no real value to emotional responses anywhere in the market beyond blind luck.

So we saw a late day parabolic ramp, which looks to have been set up earlier in the afternoon. This move looked like an ECB QE knee jerk reaction, even though we saw no such thing or when we did it was for a very grief time in pre-market. I believe the reason is, the ECB's action was 100% discounted with 2 years advance notice, there's not much left other than "Sell the news" without an announcement that blows market consensus out of the water which this did not do.

However along the same lines, as discussed at length in numerous posts specifically related to Central Bank actions, the price movement is what creates perception and in almost all cases such as this one, the set-up for that price movement is in place a week ahead of the actual event. This was discussed at length yesterday in the NFLX trade Set-Up post...

"THE MARKET IS ABOUT PERCEPTIONS" 

 "...at the speed of trading these days, the reaction is out far before the entirety of the information is out and as such, it's the reaction (price movement) that dictates the initial "perception" of the information."

The post is a good overview of some good information that's not specific to NFLX.

That's it for this post, although I've already collected most of the charts for the Daily Wrap which I'll have out ASAP.

While intraday moves like today's afternoon move are always "emotionally moving", nothing happened today that we haven't expected for the better part of a week.