Market Update

This morning as I was going through the Index Futures charts, as I mentioned in the A.M. Update, there was just pure slop throughout most timeframes as the "loitering" in the area of the triangles' apexes continues (see last night's Daily Wrap for an overview). I wouldn't expect much different considering the "loitering" effect.

The clear chart however is the big picture and that was posted again this morning in the A.M. Update, but it is simply the 4 hour Index futures with the strongest, clearest signal as it reduces the noise from all of the meat grinding chop...

 ES 4 hour 3C chart with our head fake move above the triangles in the market averages (yellow) and a deep leading negative divergence that has just grown worse and worse.

As for the near term action...

 This is the SPX daily chart, it's still loitering around the area of the triangle's apex (orange), a reversal process this morning rather than a reversal event is certainly not unusual, nor is early morning stop runs. This is today's "Star-like" candle (daily).

 As for the intraday SPX chart, a depiction of the reversal process which is much more common than a "V" shaped reversal event although those have been increasing common in this loitering area/meat grinder.

 I'd normally be suspicious of a possible "W" base for a stronger move higher, but in this case taking a closer look it appears to be 2 individual events and as I said about the charts, they are so sloppy; if this were a larger base area to bounce from, they'd have clear/strong positive divergences.

Looking at SPY in the same area intraday...

 The 3 min chart building a larger positive divergence and although we are still very choppy, price action is turning more lateral (reversal process). I still expect that we will see an oversold (1-day breadth condition) bounce today from yesterday's internals.

 This 5 min SPY chart is about as far as the positive divergence goes, thus not very far and in line with the kind of move expected. As to the question of a wider base mentioned above...

Here are the 2 base areas that we have had little bounces (chop) off. They are 2 individual events with distribution of the first in-between (red). Note the head fake area in yellow to the left.

Again just so you keep the bigger picture in mind and don't get lost in the lines, the 30 min SPY leading negative divergence with the worst distribution at the apex of the triangle/breakout area or I should say "Failed break0out" area/head fake.

I'm not adding any more long exposure (for short term trades) unless the chart is screaming. There is just so much damage done to this market right now, it's simply not worth it to me without a strong reason.