Market Update

I just took a look at Leading Indicators, combined with today's earlier intraday inverse H&S pattern , the market should have every advantage on an intraday basis. The Pro sentiment indicators are leading, VXX and spot VIX are under-performing on the day, but that may be because they want /need to pullback to accumulate. HYG is in line intraday, but still has a little upside on the SPX overall over the month long period. Yields are also supportive as treasuries have been not performing today and credit isn't doing anything intraday that would make any difference, so from that perspective, the market should have every advantage to bounce off the Inverse H&S price pattern created earlier today, although it's a technical event and not a very big one at that.

Although I already knew this just from the relative performance of TLT, VXX and HYG, the Capital Context SPY Arbitrage model is positive to the tune of about $.50 (SPY), again another short term / intraday advantage for the market.

Even the intraday SPY charts give it every advantage to be in the green today rather than red, but thus far it appears to be following the path of highest probabilities, that's simply an observation, not a forecast.

Here are some examples.

 SPY 1 min intraday is still leading so the intraday upside move should still have the short term advantage.

As you see though, SPY is breaking to a new intraday low which is more along the lines of the highest probability resolution to this bounce, not so much the intraday probabilities.

The SPY 2 min is still in leading positive position and with leading indicators, should have been more supportive to the SPY.

The 3 min chart is nearly perfectly in line intraday except you can see that sharp negative from Friday.

 Which puts the highest probability resolution of the bounce off the 2/2 lows as fading back to the downside, this is how much damage was done Friday in the SPY alone, however we are looking at multiple timeframe analysis and intraday, SPY had all the advantages, even a technical price pattern traders would/should have chased, but it never got the opportunity to breakout.


As for the 5 min chart which has been negative throughout the entire bounce process in all of the averages, this is the highest probability resolution, the only thing we were missing last week was a reversal process which is about there now, it may be a little narrow compared to the usual, but lets not forget that every bounce attempt in 2015 so far has failed prematurely.

This one as of right now on an intraday basis has the only difference between it and them, leading indicators and short term intraday charts are still on its side unlike the last 2 failed attempts.

 As for the 2 min QQQ I showed earlier and of course last week, it has moved to a lower low today as you can see, this is the only average of the majors that saw the odd, bearish signals both Thursday and Friday, the others saw it Friday.

And the IWM 2 min is close to a new low, obviously the Q's look the worst, then IWM and SPY looks the best as already mentioned.

Unless this is some head fake, short term stop run which I'm inclined to think it is, the other possibility is that fear is overwhelming greed, likely based on Greece, this makes sense considering the only other two bounce attempt in 2015 both failed early as well, again the difference though being Leading Indicators weren't still supportive and charts like SPY 1 and 2 min weren't still supportive, they went clearly negative.

Last night I said I didn't see the market just heading down from where it was last night behaviorally speaking, it's just not a common behavior for the market, a counter trend bounce intraday would have made more sense before a new leg lower, but the lateral price range today that was the basis of the inverse H&S performs the same function. 

In other words, if it weren't for leading indicators and SPY 1 & 2 min charts, nothing about this decline would be questionable as it was the highest probability resolution before it even started, but because of those 2 factors, I do have some question.