Market Update

I'm hoping to get several more updates out on the broad market as well as some specific assets like NFLX and AAPL, doing my best.

As to the strange activity, charts, lack of confirmation, volatility extremes, in essence, it's just a VERY strange day starting with a very strange set of charts late last night (or very early this morning).

I'll try to get this market update out ASAP and get to other things...

I have to consider a few things and there are still a couple of assets/indicators I need to look at before I can make the most informed forecast. The two major things I have to consider is whether this is a true, real fall in equities, rising volatility, the same aggressive selling seen earlier in the month on a bounce attempt that only lasted 2 days or if this is a "knock prices lower to accumulate using the thing overnight markets".

Right now the Intraday Index futures are either in line or have a slight positive bias to them. The TICK Index has a positive bias to it as you'll see, which is something that bothered me from the open/early this morning. However not everything is looking like this is the obvious probability. A compromise "could" be some accumulation of lower prices today just for a F_E_D knee jerk move. As we have recently discussed at some length, the market moves so fast that often things like NFLX's crappy earnings are defined not by the evidence as price has moved before you can read the first word in their earnings, but rather defined in the very short term by price action. NFLX was a good example of this, it was set up in advance of earnings and I suspect no matter how bad they were, it was going to fill that gap and that is why the set up for NFLX to rally on earnings was put in place, it certainly isn't for the earnings/guidance, which is a short term perspective, sometimes even a useful edge.

This is just one of the scenarios I have to consider, I'm not assigning a higher probability to it, just mentioning it. PERCEPTION is what moves markets and if you can define a fundamental event by price movement, you have defined the perception of that event at least in the short term.

 IWM 1 min intraday "looks" like it's going to rollover soon as the divergence is leading negative.

 It has largely been the 2 and 3 min charts where there have been "anomalies" that have been strange and out of place, this is largely what I'm trying to understand. The 2 min IWM is rather weak though as well in this instance, but as we saw yesterday, Friday and today, even the 3C charts of the averages, not to mention the averages themselves, are all over the place in shorter term timeframes which is why I called for R2K relative out-operformance this week vs the rest of the averages, its charts. These charts are obviously not a mistake when you look at relative performance the last 2 days.

*I just had to put out a quick market update as the short term signals above are starting to turn price to the downside intraday.

 IWM 3 min from a positive at the base area (16th) to in line as expected to a leading negative divegrence, not a huge one, but a definitive change of character. The yellow trendline is yesterday's close so the IWM filled the gap and looks to be rolling over presently.

 The strongest IWM chart, well above and beyond the other averages is the 15 min chart, in this case it is in slight leading negative position , but has a relative positive divegrence. This divergence looks like one large positive, last week my best guess after looking at everything was that these two base areas, the first of which failed, are two separate events rather than 1 larger base.

 R2K Futures 5 min shows last night's divergence that I posted and the current position which is leading negative. I'd think if there were a lot of accumulation of the market on weakness, the IWM would not have filled the gap and this would show a clean, clear positive divegrence on weakness, instead it's about what you'd expect on weakness.

 The R2K 7 min chart is like the 15 min IWM, it's still pretty strong, although damage was done to it since last night's divergence in ES and it is starting to take up a leading negative position.

 SPY 1 min started to look like it was getting ready to pullback intraday, of course these captures are before a small pullback just started, I was hoping to have this out before then.

 This is one of the strange charts, SPY 2 min, it looks like a positive divegrence on the gap lower today.

However when looking at the stronger and more important 5 min SPY chart, which is where it had a solid positive divegrence for the base out to, it's clearly seeing deterioration with a leading negative divergence.

This chart appears to show what I suspected we might see, which is what we saw on the early January bounce attempt, "Aggressive selling".

 The 15 min, longer term and next trend or bigger trend chart is clear and leading negative since the rounding December top. You can see the base from the 14-16th and 3C at the lows, near a new leading negative low while price is extended off the base.

 The 5 min Es/SPX futures chart also shows the weakness not only from last night and in to today with the faintest of positive divergences to the far right (small relative positive, likely for the intraday "V" bounce), but also the deterioration from last week (Friday).

 The ES 7 min is leading negative, this was in line as of the close yesterday so that's some significant deterioration on a 7 min chart in such a short period.

 QQQ 1 min which has obvious negatives, price was in line at the green box.

QQQ 3 min went from in line off the base which is stage 2 mark-up in to stage 3 distribution, again today it's close to in line with the 3C leading negative divergence.

 The QQQ 5 min chart with the stage 1 base (Jan. 14-16th) and a pretty clear (not the cleanest) negative divegrence which price has obviously responded to.

 QQQ 15 min with the larger 3C trend just leading negative to lower lows even in the face of this bounce, clearly suggesting what we expected as soon as we saw the base or even the first early January oversold base, distribution in to higher prices.

 I think the 30 min chart makes the higher probabilities very obvious,

As for the 5 min NQ/NASDAQ 100 futures, in line at the best, this is not the kind of divergence I'd expect if this move lower were being accumulated ahead of the F_O_M_C tomorrow.

 The 7 min chart which has been in line since the bounce started showing weakness Friday and 3C and price are in line- price//trend confirmation.

 This is what has bothered me a bit, the NYSE TICK for today, it hot a low of about -1300 on the open, extreme, but not that extreme and the rest of the day trending higher at levels > 1250.

Here it is on my custom TICK indicator.

Since capturing these charts, this is the updated...

One of the best early warning intraday trend changes, TICK breaking the nearly day long channel.