Pre-Daily Wrap

First, I'd like to welcome all of our new members to the pack. I'm very grateful to have been given the opportunity to share what we do with you and hopefully you'll find it useful. Always feel free to contact me any time.

Today has been one of those days in which I feel like a 1-legged man in a butt-kicking contest. There are so many assets, indications and trade set-ups to check while trying to put together what's actually happening and what that means to our strategic and tactical plans moving forward.

I have quite a bit to cover tonight, but the Daily Wrap will be out as it is every night.

Earlier I alluded to today's situation which I'll elaborate on more later, it is very much within the realm of recent expectations and long term concepts that have proven very effective.

Specifically I wanted to get to something that was in last night's Daily Wrap . These are excerpts and the entire post can be found at the link just above. The bottom line from last night's Daily Wrap as well as numerous posts within the day was that there was no strong technical/3C accumulation reason to look for a head fake move above different technical areas that attract a lot of attention, I've used the SPX daily chart and its March trendline that has acted as resistance numerous times now, as an example of the broad concept.

While I could not point to the kind of positive divergences or small bases that would lead such a move or an attempted move as I believe we saw today in to a weak market, it's the "Head Fake concept" which I estimate takes place 80% of the time before a significant trend reversal and this in any asset and any timeframe. For more on the "Head Fake", there are two articles always linked at the top right of the member's site:

Understanding the Head-Fake Move... How Technical Analysis Went From an Asset to a Trap

and

Understanding the Head-Fake Move... Motivation

So I'll let you read the excerpts, but the bottom line was there were no divergences that would support such a breakout / head fake move above the SPX March resistance trend line, however despite that, some lever would be used as the concept is so strong and in this case so incredibly obvious, so easy and at the most pivotal areas of all of 2015 and probably well beyond and I'm not one to rely on gut feeling.

Here are yesterday's Daily Wrap excerpts, considering the odd behavior in the market today:


"I'll just say broadly that my gut feeling is that we see a SPX head fake move for reasons I have laid out for years and more recently, numerous times over the last several weeks as the March SPX trendline became more obvious and as the resistance at the trendline became more numerous.

We have tagged this trendline's resistance so many times, it's a perfect set-up, it's free money for smart money, it's easy last minute dumping of a lot of shares without anyone questioning who's on the other side of the trade. My gut says, "It makes sense", if I were the crooks with the invisible hand, that's what I'd do.

Today's SPX closing chart, another test/failure at March SPX trendline resistance.

I've explained as best as I can the head fake scenario, the probabilities of it which in this case would normally be very high and the lack of Evidence to create the scenario, still we're not that far away from the trigger that would hit limits and get breakout buyers chasing the market, thus creating the head fake scenario without any investment from Wall St. In addition in the Leading Indicators update, I showed you how pros in HY Credit are going the other way, but I'm still leaving this scenario very much open as it would be a fantastic tactical entry and a great timing trigger for a downside pivot of this move that is essentially exhausted as it keeps crashing in to SPX March trendline resistance with just about everything we were looking for having turned already.

MY LAST POST, Quick NFLX/Market Overview GAVE THE PROBABILITIES BEST AS I CAN GAUGE THEM NOW WHICH IS TO SAY THAT INDIVIDUAL WATCHLIST ASSETS LOOK VERY CLOSE, BUT ARE MISSING THAT FINAL POP, WHICH IS PROBABLY THE BEST CASE THAT CAN BE MADE FOR A HEAD FAKE MOVE BEYOND THE HIGH PROBABILITIES OF THE CONCEPT ANY TIME IN ANY ASSET.

 Here's an example that I think distinguishes the probable short term from the highly probable bigger picture...

 DIA 1 min intraday and a positive at the 2 pm lows, the "toe hold" I suspect the market will try to work form.

And the bigger picture, but not so far away that it's irrelevant, it's very relevant.

DIA 15 min chart, remember the 15 min timeframes were all positive (except the IWM) in early April, now look at the DIA's 15 min leading negative divegrence, it JUMPS OFF THE CHART, THIS IS THE KIND OF CHART I DON'T IGNORE.

IF I'VE DONE MY JOB IN EXPLAINING WHAT WE ARE LOOKING FOR AND HOW THINGS HAVE PROGRESSED, THEN YOU KNOW WHAT THE IMPLICATIONS OF THESE CHARTS ARE AND WHY IT'S DIFFICULT TO CALL FOR A HEAD FAKE MOVE, BUT THIS IS MY GUT AND THE CHARTS, IT DOESN'T END WELL FOR THE MARKET."