Market Update

Volatility is picking up on an intraday basis, that is a change in character and I believe we will be seeing a change in trend shortly. I have been looking at my watchlist all day and seeing a lot of examples of stocks like IYT which broadly look like excellent shorts, but have intraday signals suggesting a move higher.

Please don't mistake what I am saying, significant damage has been done to the market today and the change in volatility is very telling .

Earlier I was hoping we might see a bearish engulfing candle which would have looked something like this...

 This daily chart of SPY was captured at the right moment to show what in engulfing candle(bearish) would look like. However since I suspect we will get a bounce before the end of the day, I doubt we end with this candle. Unless of course the divergence is just completely run over by panic selling.

 TF/ Russell 2000 futures intraday one minute with a positive divergence since distribution at the morning highs.

 The same for ES

As well as NQ/ NASDAQ 100 futures.

 This is the intraday flameout or short term capitulation/selling event I mentioned in the last post keep an eye out for. This is the IWM 60 minutes chart with something similar to a bullish hammer on increased volume. While technical traders believe this is a negative sign, on an intraday basis this is most often short term selling capitulation.

 Here is a much better formed hammer on the IWM 15 minute chart with increased volume, typically we would take this as a flameout or in today selling capitulation.

As to the intraday positive divergences that lead me to believe we will see a bounce from what has otherwise been a parabolic selloff in IWM (and I never trust parabolic moves up or down)...

 IWM two minute intraday positive

 This has migrated/ strengthened to the IWM three minute chart.

 It is now making its way as a leading divergence on the IWM five minute chart. This is not a large divergence, but it could be a sharp move which would be useful in positioning such as this weekend's featured charts like IYT or IBB/ NASDAQ biotech (if we get lucky with that one).

 The QQQ five minute chart shows how much damage was done today specifically. It is significant.

 This QQQ 10 minute chart is in a free-fall leading negative divergence all through today, again serious damage and this after CNBC has pumped the market as ready to break out from triangles. To me it looks a lot more like Smart-Money getting out as fast as they can before the F_O_M_C.

 And the larger, Stronger and 30 minute QQQ since the positive divergence into the April 2 forecast.

This should make smart monies intentions clear. They plan well before hand and they almost always execute the plan. It should be plain to see that they gave the market enough support to be able to sell or short into higher prices knowing retail will follow chase a break out above a very common technical price pattern like a triangle.

 SPY one minute intraday positive divergence since this mornings distribution at opening highs.

 The SPY divergence has migrated to the two minute chart showing strengthening of this divergence although still on a very weak intraday timeframe especially compared to the damage done today.

 SPY three-minute with distribution at this morning's highs and a leading positive divergence that has migrated from the one and two minute charts.

As mentioned earlier, NYSE TICK has seen a large pick up and volatility with an upper tag of nearly +1200 and a lower tag of over-1400. This tells us something about the very near term as increases in volatility tend to precede changes and trends.