Market Update

As I said last night in the Daily Wrap, for a HEAD FAKE move, I wasn't impressed with yesterday's price action specifically because they are extreme moves that push emotional extremes and create movement via that mechanism. I also mentioned today's weekly Friday Options expiration max-pain pin which usually runs until about 2 p.m. and after that the market tends to do what it wants, but the underlying trade/3C signals we get are some of the best of the week.

Today's QQQ is acting much more like a "typical" and expected head fake move (remember AAPL earnings Monday). The rest of the market is acting much more like the typical op-ex max pain pin that I described as typically opening near Thursday's close and hovering in that area until about 2 p.m.

Ask yourself what is the catalyst for the NASDAQ move today? Earnings? I don't think so. I believe this is the head fake move that we should have seen yesterday.

There are still a lot of charts to go through and I am still going through a lot of individual assets and trade ideas as quickly as I can. Here is a brief synopsis of what we are looking at considering the futures update from this morning which has finally hit the anticipated set of signals in everything except, the Russell 2000 strangely (I would've expected the QQQ).

 The QQQ Daily chart, please click on it to enlarge if you can't see today's price candle well. This is the kind of break-away gap above a very obvious resistance range that will get traders chasing price which allows smart money the demand and higher prices their large positions require so they can sell in to or short in to (both are selling) without collapsing price around their position and no one every asks, "Who's on the other side of the trade?" which is detailed in my two articles on the "Head Fake" move linked on the members' site.

Also note volume today, it wreaks of a short squeeze which is exactly the kind of emotional extreme I was talking about last night when I said I was disappointed in yesterday's move. It is this emotional extreme that causes movement in the market, which is one of several reasons for a head fake move.


By contrast…

 This SPY intraday chart shows the type of price action that is consistent with an options expiration maximum pain price pin. The yellow area consists of yesterday and today.

 Today's in NYSE TICK index is very mellow at-500/+700, this would make sense with the kind of price action seen in the SPY above. Intraday breath is very poor.

 This is the QQQ 1 minute intraday chart, Obviously there is no confirmation of its gap up today.

 The QQQ two minute chart is showing the same and distribution in to higher prices which is the point of a head fake move.

 I always try to use multiple time frames and multiple asset confirmation. Although SQQQ and TQQQ will move with the QQQ, volume is very different so if there is not an actual confirming signal it will not show up as the only requisite for these ETFs is to match the underlying's price, not volume. As you can see the two minute chart of SQQQ, it is giving a nearly identical, but mirror image positive divergence as this is the three times leveraged short QQQ ETF. Confirmation

 The SPY intraday one minute chart does not look unusual at all.

 However looking at a trend basis of the intraday charts(2 min) it's quite obvious that the igloo and chimney price pattern which you'll see below is seeing distribution at the chimney which is the head fake move for this common Price/top reversal pattern. This is a different scale of head fake move as compared to what we were expecting and now seeing in QQQ.

 SPY trend sense the April 2 market forecast and you should be able to make out the igloo/ chimney Price pattern which is one of the best price based indications we have four a timing signal at a pivot point. These tend to fail quickly in reverse quickly once the head fake move is in.

While much harder to see currently, this is the head fake move in the QQQ. It is much easier to see in retrospect obviously, but this is much more in-line with the kind of emotion-moving extreme that I expected as I think was obvious in yesterdays posts.

The Q's look like a very obvious short squeeze, which is why once smart money can lever price above the breakout area, retail takes over.

A typical short squeeze in QQQ. Intraday price action shows very few to no pullbacks on light volume. This is overall very weak tone for such a move and in line with expectations of a head fake.

Ironic that this is so close to the Futures charts giving a signal that we have been anticipating and waiting for since the April 2nd forecast.