General Market Update

This is a GREAT example of what happens when you don't have intraday gap confirmation (since we were just talking about it in the AAPL post, although AAPL is a slightly different situation)...

Pay attention to the gap opening and the 1-2 min charts that failed to confirm in all cases.

 SPY 1 min intraday, the red box to the right is the opening gap, you can see there was no 3C confirmation, you can see what happened next, which ironically does have 3C confirmation.

SPY 2 min, again, a lower 3C high at the gap up = NO CONFIRMATION.

 And the 3 min chart's positive yesterday morning to the afternoon highs' negative and this morning's gap up, again, no confirmation.

The 2 and 3 min charts were bothering me a bit yesterday as they didn't seem to fit with what we were seeing every where else, but they now look to be falling in to shape and making more sense on a chart rather than leaving an unknown out there.

 SPY 3 min is not leading, it's looking like a natural progression now or moving in that direction unlike yesterday.

Sometimes it's just being patient and letting the market tell you rather than scrambling to try to force an answer.

SPY 5 min which is where the bulk of the positive divegrence from 1/14-1/16 was found, I think what has happened since and the 3C divergence now is pretty darn clear.

Just as a bigger picture reminder, since the very strong accumulation of the October lows, the base that we forecasted would produce a "Face ripping rally"and that as bearish as EVERYONE was at the time (I don't think you could find a bull even among the "Buy the Dip" crowd)  that the move that would come as a result of the base would be so strong that no one would have the emotional fortitude to be comfortable shorting in to price strength at the appropriate time - again because the move we forecasted was to be that strong which it needed to be at that point with EVERYONE calling a top in the market.

You may recall I even said, "Bookmark this post, I guarantee after this move you will be terrified to short in to strength at the right time", which is only understandable if you remember just how bearish everyone was at that moment in time, it seemed impossible that we'd even see a slight bounce.

In any case, I think the 3C trend is clear from the October lows which were stage 1 base, the rally was stage 2 mark up and ever since then we have been in stage 3 distribution with a move below the October lows expected and labelled as stage 4 decline.

 QQQ 1 min, again no confirmation on the gap up this morning.

QQQ 2 min no confirmation of the gap up...

QQQ 2 min , no confirmation of this morning's gap up, but strong leading negative divegrence leading to this week's downside.

 QQQ 5 min in leading negative position off the 14th-16th base.

 And again the bigger picture reminder of a 15 min chart's trend off the October lows. I don't think I need to label the divergences.

 IWM 1 min, no confirmation this morning.

IWM 2 min the same

IWM 3 min also the same (gap up at the yellow arrow)

Also the same out to a 5 min chart, leading negative

The IWM base positive divegrence reached out to a 15 min chart which is part of the reason we expected to see Russell 2000/IWM outperformance this week relative to the other averages which we have sen in a huge way. This chart is starting to go sour.

And again, the longer term 30 min chart's bigger picture reminder off the October cycle base.

I'm going to try to get Futures up as well as there are some interesting indications there as well and take a quick look at leading indicators, I'll post anything that's standing out.

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