Market Update (Intraday)

Thus far it's pretty quiet, not too different than a normal options expiration Friday with a pin in place (typically around Thursday's closing range). However the last 30 minutes or so are getting a bit more interesting, after 2 pm there should be some excellent data.

I added a couple of extra charts to the intraday update, just because I think they are an excellent visual of market character and 3C character through the 4 stage cycle beginning 1/29-2/2 (stage 1 base).

 This orange indicator is not 3C, it's one of the most overlooked and useful indicators that you can apply to price or other indicators to get more detailed and advance notice of where the indicator is likely to go before the indicator itself actually shows it, kind of like turbo charging an indicator, it is Rate of Change in this case applied to price.

The 1/29-2/2 base is highlighted in white on the time axis, note the positive divergence in ROC in early February as price itself is telling you almost nothing with price levels at almost exactly the same spot. This is the visual proof of the concept, "Changes in character lead to changes in trend" and to the right, we obviously have another divergence or change in character, but the one you might overlook is volume which I don't think you need any moving averages or ROC applied to in order to see the change in character there. Although volume analysis is a lost art, one of the most fundamental concepts is rising price should see rising volume.

Before we had the F_E_D intervening in the market in late 2008, volume analysis would have probably been my second favorite indicator, then it really didn't matter much as the F_E_D quadrupled the size of their balance sheet, but since that has ended, volume analysis once again is taking on new meaning and at a time when an entire new generation of traders have no idea what it means, just as 1/3rd of professionals haven't seen a rate hike (the last one was 2006), how many more including retail have no idea of what volume can tell you?

Just as an example of what a healthy market looks like and when volume analysis was important as it is becoming again, note the volume from the last bull market
(2002/2003 - 2007)...

 S&P

Or further back... The yellow larger spikes in volume are typically change in character events like capitulation or churning.

Here's the Q's , the same timeframe as the SPY above.

Intraday SPY , a little interesting so far...

 As mentioned, the same intraday chart as a trend, this is why they are used for timing purposes. If you can identify the stage 1 base you'll see a positive divergence, stage 2 mark-up is pretty easy to identify as 3C will usually confirm in that area and stage 3 top/distribution should also be easy to identify.

The point in understanding the 4 stages of a stock's cycle is knowing where you are to know where you are most likely going, this applies to a 1 min chart or a weekly chart.

 QQQ 1 min looks dangerously like it could drop here.

IWM is in line

Again, the same chart's (IWM) trend.

I'll have some additional market updates as well as asset updates.