Market Update

As mentioned in today's earlier market update, there's still gas in the tank at least for the SPY and QQQ, but that doesn't mean it's not being perhaps, rapidly depleted. The first hint of higher prices in SPY and QQQ since last week have produced some of the strongest intraday negative divergences in the pair since at least a week or maybe more.

In addition as it's already evident in Russell 2000 price performance which is half the SPY and QQQ, there's additional weakening there as well, further supporting the notion of rotation in the averages (not good for the market unlike sectors), as we are already seeing in price performance today.

A look at intraday charts...

 This may look like Russell 2000 futures intraday, but in fact it's ES/SPX futures.

This is NASDAQ futures intraday, both look substantially worse for the wear since the earlier market update.

 And TF intraday.

This is also present in the SPY charts unlike areas last week where there was almost no movement on these intraday charts which as predicted then, looking back in reflection it would be easy to see why...the SPY and QQQ made no price advances outside of their bases for the week, thus there was nothing to sell in to, thus no divergences, just waiting.

 SPY 1 min

The divegrence has migrated all the way to the 5 min chart now from the 3 min chart previously which is a big jump between a 3 and 5 min chart, although it sounds very small, it is significant.

While the larger trend for the QQQ on a 10 min chart like this is clearly negative and stage 4 decline, you can see the "gas in the tank" to the far right for a bounce, however the larger negative is not over, the smaller positive is just inside that larger negative trend which in multiple timeframe analysis would equate to any bounce in the QQQ would fail and resume the larger preceding and current leading negative divergent trend, DOWN.

 However despite "gas in the tank", the QQQ is also seeing further chart deterioration as the 3 min intraday leads negative.

The IWM intraday is worse, price performance is worse and it has rotated out on a relative performance basis.

The former "gas in the tank" is now reversing and this IWM divegrence (10 min) should continue to deteriorate and return to the larger overall negative trend.

As for levers, there's a little weakness in TLT along the lines of a gap fill that could help the market maintain and...

 HYG, although down on the day, has a small intraday positive divergence that "could" help if it can lift HYG out of the red.

As for VXX, I'm glad to have closed the UVXY long on Friday and preserve the gains, but as I said, I'll be looking for a new entry long in short term VIX futures and they are acting better than you might expect given the percentage gains in SPY/QQQ.

 VXX intraday and the reason for closing UVXY Friday evident, but an overall positive reaction to the pullback in VXX/UVXY so far, confirming the negative reaction in the averages and Index futures.

While VXX 3 min is not yet leading positive, more in line except for Friday's divegrence which was the reason (or one) for closing UVXY, remember what sits at the 15 min+ charts for VXX, UVXY and XIV...

VXX 15 min leading positive like the larger leading negative divergences in the averages.

While there are other assets to look at like EUR/USD...

Which is clearly playing a role in the road block in price gains since early momentum this morning...

My impression is there's a bit of a hurry to sell in to strength quickly , the only reason I can think of is the same I suspected last week and why I suspected we'd bounce right up to the event, Wednesday's F_O_M_C policy statement and whether or not "Patient" is among the words in the statement which as of now, is widely expected not to be.