Market Update

This is where the 5 min charts should be cleaned up.

As you saw today, the 1-3 min charts are no longer ambiguous, they used the earlier price gains to sell in to, just look at the intraday TICK all day today trending down. To finish up and clean up the 5 min charts (and this is just from our perspective, from the mechanics of it, it's just smart money unwinding bounce positions like a reversal process, they are large positions and take more time, there's nothing any more meaningful about a 5 min chart to Wall St. than a moving average, they are reflections of behavior).

So you saw the parabolic move stall out and appear as if it will try to put in some upside gains that can be sold in to or shorted in to. The gas in the tank (accumulated shares) at the 5 min charts basically need to be sold off or drained in which case, the 5 min charts will look worse than they already do.

As for Leading Indicators, other than the seriously bearish yields...

 5 year (red) vs SPX (green)

10 year (red) vs SPX (green)

30 year (red) vs SPX (green)

All of which are pressuring the market to the downside... There's not a lot of other movement. There's a bit of deterioration in pro sentiment, but perhaps the biggest change that is underway is HY Credit, it is starting to finally take on a more negative local tone (long term is very negative).

 HYG (blue) vs SPX gave up all gains today and moved to red on the day. The market doesn't follow the HYG 3C divergences, it doesn't even know about them, they just point to the direction of HYG and the market follows HYG's price. Note at the intraday parabolic flameout, HYG went positive in a small area and led the SPX.

There's nothing wrong with this, these 5 min charts need to be mopped up.

The SPX:RUT Ratio in the middle also diverged intraday to positive at the lows and the VIX Term Structure put in a 1 min buy signal, very small, nothing like the one on the 6th or past ones, but indicative of an intraday low probably being established and giving you a chance to get in to some positions without chasing them which would have hurt even intraday today.

As for the 5 min charts, I'd say the Q's and SPY are about the same, definite deterioration, the IWM is worse and just about where we want it so any upside in the IWM would likely open up some small cap short sales or IWM shorts like SRTY (3x short IWM),

 SPY 5 min

QQQ 5 min

IWM 5 min.

This is opportunity. If we can get some price gains and keep these 5 min charts turning down/deteriorating, we have EXACTLY the edge you only get once in a while, this is why patience pays.