Market Update

It has been an exceptionally dull day most of the day, even the NYSE TICK has been "Blah", however several trades are moving our way including TLT setting up, USO breaking down, GLD looking ready to break lower and the charts for the averages have finally started to move.

I always warn about quiet markets or dull markets, "They're like the kids in the room next door being a little too quiet", you know they are up to something and it's easy to let your guard down.

In any case, there are some potential trades that could be taken like VXX long or IWM short, but these are the moves that are meant to set up the second trend/trade of last week's forecast for this week and they will eventually lead to setting up the third and largest trade. Personally, I don't feel comfortable trying to scalp this close to the scalp and would rather wait for the intended trade set ups to fall in to place. There's that pesky patience thing again...

There are quite a few charts below for multiple trend analysis and multiple asset confirmation, some may give you enough of a view to make a decision as to whether you want to engage in scalping trades here.

 This is how the averages have looked intraday most of today, nearly perfectly in line as is this SPY 1 mn chart.

There's not much of an edge with the chart like that other than position management. However, these have recently turned in the direction we have expected.

SPY three minute leaving negative  and strongly suggesting the near-term downside move that we have been waiting on to decide whether to enter positions for the next anticipated leg (up), which I suspect we will.

 VXX trades opposite the averages so this two minute positive divergence also suggests the averages are going to move lower. However, this is not quite enough of a divergence for me to be willing to risk money on a trade.

 Three minute VXX chart shows the same with a little more strength. Again, this is the difference between probabilities which are that VXX moves up very near term and high probability, low risk trade setups.

 This is the inverse of the VXX, XIV and it trades with the market. Note the intraday deep leading negative divergence after being in line most of the day. This is confirmation of the VXX charts above.

 VXX 5 min doesn't show any divergence, this is why I do not consider this a high probability trade.

The problem with probabilities is that VXX could move up and I expect it will, but without strong confirmation on charts like this, it could also fall almost instantly wiping out all gains and leaving you at a loss.

 XIV 2 min again confirms the VXX and market averages suggesting that near-term pullback we have been looking for.

XIV 5 min is getting a little more serious, If VXX we're also positive on its five minute chart I would consider a short term long trade.

 QQQ 1 mn has seen some deepening leading negative divergences intraday.

As has the two minute chart.

The IWM is showing a more spectacular leading negative divergence intraday suggesting the lower prices we have been expecting near-term.

IWM 2 min

IWM 3 min

Just because I took a quick look I thought I might add this as well as most stocks and industry groups will move with the market. XLF/ financials.

 1 min leaving negative

 3 mn deeply leading negative

5 min again suggesting with multiple assets confirmation, we she market downside in the very near term as expected.

This downside I am looking for is to build a stronger base for a bounce which is where I would want to take positions. This 10 minute QQQ chart is indicative of the expected bounce so long as it continues to hold up.

QQQ 10 mn.

After that, As the "Week Ahead" forecast suggested, we'd be using any bounce price strength to enter additional short positions.

This 15 minute VXX chart is indicative of the major market downside I am expecting after our bounce.

XIV, the inverse of VXX on the same 15 minute chart shows perfect confirmation. You can almost consider XIV as the SPY/market itself.