Market Update

As you probably recall from Friday's Week Ahead forecast, one of two scenarios (both were bounces in the early part of the week) was that the market put together the base it needed for a short term bounce which is pretty darn normal at the 200-day SPX support after 5 days of red closes.

The IWM call position was added to this week and is sitting pretty close to breakeven, but I'm getting a bit more impatient with the market and may be looking to close the position sooner than later. This is not based on anything especially new, it's based on the process of distribution I chronicled earlier today.

Thus far, although I'd completely expect traders to look to hedge positions in front of an unknown event such as the 2 p.m. F_O_M_C, I have to say the VXX / UVXY long positions and their respective charts are looking exceptionally strong (UVXY long idea was left open despite knowing the probability of a bounce as well as all core/trend shorts).

I'm seeing what looks like more deterioration, I would't call it SCREAMING as of this moment, but it's a pretty persistent trend and I don't have a lot of confidence that the Gas in the Tank charts can hold out through the entire day even if it weren't a F_E_D /  F_O_M_C day.

Right after this post I'm going to look at Leading Indicators and Futures as quickly as I can and make some decisions going in to the F_O_M_C, but for now here's a sample of the charts...

 SPY 1 min leading negative divergence.

 SPY 3 min leading negative in to today

 Damage moving to the SPY 5 min chart today

 For context, the SPY  15 min "Gas in the tank" chart.

 QQQ 2 min damage in to today.

QQQ 3 min negative. Like I said, it's not screaming or jumping off the chart with urgency, but it is persistent.

IWM 2 min intraday leading neg.

 IWM 5 min

This is a different perspective of the same IWM 5 min chart with a closer zoom to compare today's signals to yesterday's.

 IWM 10 min which you could do the same thing with as I did above with the 5 min chart, so it's some pretty significant movement.

HYG which was used earlier as support for the market is seeing intraday negatives in to higher prices as well, although I suspect it could still support the market in a pinch.

The NYSE intraday TICK.

And our custom indicator since the capitulation lows at "a", the second part of the base with improvement in breadth at "b"  and you can see today's breadth falling off.

Here's a closer look.

The custom TICK indicator with market breadth from very strong yesterday to deterioration today.

I'll get back to you on Leading Indicators and hopefully a review of Futures.