Early Indications

Earlier Indications have a distinct look that could be taken one of a couple of ways: Caution over what Yellen might say in the Q&A portion of her congressional testimony, but it seems from the opening statement that she has basically given up all that she's going to so their may be some entertaining fireworks over various bills that seek to hold the F_E_D more accountable, their could be duels over F_E_D leaks and lack of congressional involvement in criminal probes within the F_E_D, but policy... I doubt it.

Forgetting about Greece for the moment because it seems very early for the market to be reacting to a vote that likely won't take place until the wee hours of early morning (local), the other way it could be taken was as I had said last week for this week's forecast, that the bounce would take up most of this week,  but that would include the falling off of upside momentum and likely the reversal process. To me, if all things were equal, based on what I've seen (especially yesterday as well as this morning's review of Index Futures) I'd say this looks a lot more like the reversal process.

 The SPY 1 min opening chart with a negative divergence in to yesterday afternoon and just about in line this morning so far, but...Take a look at the same chart's trend...

 The SPY 1 min chart's trend since the base for the bounce area and what looks like a reversal process.

The SPY 2 min chart with a sharp leading negative divergence also through much of yesterday afternoon and near a new leading negative low.

 The SPY 5 min chart's trend to put and keep things in perspective, as I said all along this is a bounce, but a risk off bounce, one used to sell in to as nearly all bounces have been this entire year and then some.

 The QQQ 1 min chart also negative in to yesterday afternoon and leading negative this morning, not even confirmation.

And the IWM with the same negative yesterday afternoon and in line this morning so far .

The UVXY short position will likely be closed soon as the reversal process here looks strong and the divergences look as they should for strong accumulation as the position is at a gain of +30% with no options leverage, only the leverage (2x) built in to UVXY.

 The 3 min intraday leading positive in a big way at a new high.

The 5 min UVXY? also with a BEA?UTIF?UL divergence which should support a nice long position very son. The only thing I see that doesn't look quite mature is the reversal process, but it's taking shape very clearly with a "U" shaped bottom. This is no different than the typical head fake move we see right before a trend reversal in tops that form an Igloo with a Chimney price pattern, the igloo or rounding part being the top (or bottom in this case) and the Chimney being the head fake move just above the rounding top that sucks in new longs, forces shorts to cover and this is seen a good 80% of the time in any asset and any timeframe RIGHT BEFORE a reversal. So I'd expect as a matter of concept, the same head fake in UVXY, except the chimney would be inverted like the Igloo (rounding) portion is.

In this case, when I'm ready to enter a new UVXY/VXX long, I'll likely leave a little room and not open a full position with that extra room to be used to enter an options position on a head fake move as that's the best price discount on the option as well as the best timing we can ask for.

This is XIV 10 min, the inverse of VXX and UVXY which moves with the market. This is the trend view and once again as has been the case this entire time, we have a very negative overall trend and each bounce has failed. This one is giving a clear 0 min signal that has gone negative and should start leading to a new 3C low.

More to come...