Market Update

As we were expecting yesterday and today, the market is coming down , in today's case from the overnight strength in futures (price strength only, not underlying).

 SPY three minute intraday negative divergence which are the same time frames that have been in poor condition, In need of a pullback to create stable enough conditions for short term bounce as our Week Ahead forecast on Friday called for. The first order of business is price pulling back and then confirming improving 3C charts in the intraday time frames.

 DIA is also coming down this morning with this intraday one minute 3C chart and negative divergence.

 QQQ two-minute intraday negative divergence suggesting Price pullback in the very near term as we have been looking for since yesterday.

 And the IWM intraday chart with a negative divergence also pulling price back as we were expecting.

 XIV, the inverse of VXX, which moves with the market generally also showing an intraday negative divergence calling for lower prices in the near-term.

The point of these lower prices is to repair the short term charts so we can look at some possible long bounce trades, however in the condition that they are in currently I would not trust a long trade, thus the need for a pullback and these church to improve.

You can see on this five minute chart of SPY the positive divergence which was worthwhile for us (VXX Puts) as the divergence was steady enough for a short term trade. To the right and yellow we do not have that yet.

I am not married to the bounce forecast, It seems like the most likely scenario, but if the data changes so our forecast. For now I believe that we are on track as we expected yesterday going into today.