Quick Update

Also from Friday's The Week Ahead post...

"As for the averages, if we can say, "There's relative strength" in an environment that's largely very weak, then it would be in the SPX this week rather than the Russell 2000, but there appears to be significant weakness."

I wouldn't bet the ranch on this one, last week when we saw the IWM was going to outperform, the 3C charts were very strong in favor of the IWM vs the other averages, this week so far the SPX is showing better relative strength vs the other averages, but it's not the same kind of underlying relative strength in the 3C charts we saw the previous Friday which forecasted Russell 2000 out-performance which is what we saw. I think part of the reasons is the overall charts just look worse, thus the statement from above (from Friday), 

"As for the averages, if we can say, "There's relative strength" in an environment that's largely very weak..."

In any case, while I'm opening a different template (Leading Indicators), this is the gist of the near term charts via Index futures....

ES/SPX Futures intraday 1 min, note the relative strength of the 3C chart vs the Russell futures below...

TF 1 min intraday.

The futures timeframes are not comparable to the averages timeframes, these are much shorter term charts, so these are much weaker if you compare a 5 min futures chart to a 5 min chart of one of the averages. Thus this 7 min chart is about where we see the relative positive divegrence that was there Friday and put in the low this morning - it's not huge, it's not leading, it's really looking more like the chop that's expected at the different support and resistance areas of the descending triangle...

Daily chart of the SPY with the descending triangle, support at the lower trendline, resistance at the upper trendline except for the one head fake move breakout we forecast in advance (yellow) that even failed before I expected it to. To the far right we have a white arrow from Thursday with some support and higher volume, the next day was an op-ex Friday, so it looks like that may have been a big influence in keeping it inside the triangle. Today we have hit support, but volume is not particularly impressive at this point, nor is the candlestick.

This is why I'm looking at some other indications, as we are reaching the apex of this triangle, there's going to be some kind of break or breakout., Judging by the charts, where leading indicators have been, etc, my best guess would be a small Crazy Ivan shakeout, probably to the upside firs and then below the triangle which is where it could get dangerous for the market if Leading indicators give strong signals.

 At 15 min the ES chart is not positive, more in line with what has been negative price action (confirming the negative price trend here).

I'm using the NQ 30 min chart as it is cleaner, but the theme between all of the Index futures is the same, negative and leading at that. This is where the highest probabilities/resolution of price are to be found, the other charts above are more in the realm of short term price action like a possible Crazy Ivan shakeout/head fake move, which could be useful if we can determine that is the highest probability and that the market won't aggressively sell in to it, causing it to fail and stay within this choppy range, which would likely be followed by the downside break.

There's a clear change in the character of the charts since last Friday when it was clear the IWM would outperform in to the start of last week.