Quick Futures Update

Volume-wise and so far 3C indications show this as a shameful breakout, obviously they used a lever, which I haven't got to yet, but based on yesterday's odd behavior, Unusual Market Activity-I Wonder Why... I could probably take several guesses that would be very close.

Looking at the NYSE  TICK chart, it's already plain to see that intraday breadth is a very poor.

 The NYSE intraday TICK Data shows and uptrend earlier with An extreme Reading at +1750 and then everything falls off to essentially flat just as many stocks are declining as advancing. This is not the kind of breakout can new all-time highs-type breadth you'd expect to see if there were actual institutional support.

 When the April 2 forecast for the market was made, it was based on numerous indications but the broad concept was the pinching daily volatility as represented by various forms of triangles whether symmetrical or 90 degree. Apple is a good example which is why I picked it as a proxy for the broad market for the April 2 forecast. This is really no different than pinching Bollinger bands which is essentially the promise of a highly directional move. However if you look at this daily chart of ES/SPX futures you can see the distribution into the September Head fake highs which is an actual Igloo/Chimney top, Leading to the October lows where we forecast a" Face ripping rally" as too many people were calling for a top. The leading negative divergence into 2015 should be very clear which gave us the highest probability resolution of any upside move including a major head fake move such as we are finally seeing today.

While still exceptionally strong at the four hour ES/SPX futures, this is not as high of a probability as the daily chart although it is giving us the same signals with just more detail, Including a leading negative divergence into the triangle area of the SPX. While no one chart can give us probabilities, putting all the pieces together with multiple time frame analysis and multiple asset analysis gives us high probabilities which are all pointing to strong distribution which is why the April 2 second forecast for a breakout above the triangles was also forecast on that day before there was any breakout to result in an eventual failed move and new lower low.

 The hourly chart shows us hey W type bottom with accumulation going into the 4/2 forecast and distribution into that move since.

This is just further confirmation of what the probabilities already showed.

As for today… while each average is in a different position, SPX breaking out of a triangle, NASDAQ breaking out toward all time highs around the 2000 area, but the Dow and IWM, despite relative performance, are not at similar breakouts. As a common technical trader, which would you choose?

 As such, the intraday one minute ES chart is already showing a lack of confirmation with a negative divergence. This does not mean that it is a short or sell signal, It's telling us what's going on in underlying trade. In other words smart money is leaving the bag in retail's hands.

NQ/NASDAQ 100 futures are showing similar lack of confirmation or distribution in to higher prices

 At the same time VIX futures are showing a bid towards protection with a positive divergence for the third or fourth day in a row.

From here we look for confirmation and strengthening of the divergence. As laid out shortly after the April 2 forecast, there were three things I would be looking for as far as a pivot to the downside. One included the 7, 10 and 15 minute index futures charts to lead negative as a timing indication.

Although each chart is a little different the five minute ES is not confirming either and in a leading negative divergence so the next time frame would be seven minutes for a strengthening signal.

 We have a very clear 5 minute leading negative NQ divergence, note the one day oversold (breadth conditions)accumulation last Friday in which we forecast a bounce starting Monday.

 TF/Russell 2000 futures look a little different at five minutes. Remember they have not made the same kind of breakout that the SPX and NASDAQ have.

 ES seven minute showing the same positive divergence at the oversold breath condition last Friday leading to the forecast for an oversold bounce on Monday. However the most important thing is the lack of confirmation in today's move and the migration of the divergence in to longer time frames.

 ES 10 minute it is also showing distribution as today's move looks very parabolic which I never trust, no matter whether it is a move up or down.

And ES 15 minutes. We do have some negative divergences as well as the positive from last Friday on an oversold breadth condition, but we will want to see this chart leading negative like the 10 minute above it for a strong timing signal and the same for all index futures.