Market Update: IWM Can Still Bounce

When I say the IWM can still bounce, personally this is not a trade I would try to be catching (bounce), it sets up the trade I would try to be catching, (SRTY dd to/IWM short in to some price strength).

The last bout of selling with the USD//JPY taking a nose dive (I wish I had some graphics to put on the USD/JPY chart of lemmings going over the cliff as that's what my twisted mind saw looking at the chart-little animated lemmings happily marching over the cliff-like sell off).

The charts since that dump look like this so the IWM can still bounce, although a few more of those and the bounce will be a lot lower.

 SPY 1 min intraday with some 3C support, it's not a big divergence, not much of anything to look at right now.

However there was some pretty hefty damage done as you can see on a simplee 2 min chart as it is fast enough to catch the market action more immediately.

As for the SPY 5 min chart, well it speaks for itself, that is ugly and whether we bounce or chop around a bit, there's very likely no coming back from that. It seems the bounce we expected and the failure of that bounce is pretty well in cement, it's just the particulars which I'm less interested in than being ready for the trend which for the most part, I'd say we were as of last Friday.

 QQQ 1 min similar to the SPY intraday

 And similar to the SPY as far as damage.

 The IWM is more in line, this can do damage to the chart that can support a bounce and has done a little, but it can still support a bounce, the issue is where/when as the IWM can certainly bounce from a lower level than here.

 IWM 5 min bounce/positive relative divgerence still in place.

As for the market, breadth pretty much shows you what's happening slightly in advance.

 The NYSE intraday TICK breaking the downtrend channel. Note the sell off looks pretty extreme in ES, but it didn't hit any extreme TICK levels , I would say the reason is because the selling has been occurring all last week in to higher prices.

And the TICK trend which is negative as seen earlier this morning, but has a slight reprieve currently.

Again, choppiness, bounces, etc... I'd say we've cleared stage 3 and are in to stage 4 decline.