Market Update

I may have to abbreviate the Index Futures post that was part of the Futures posts (I just put out the FX/Carry trade side of the charts), this is because it looks like the market and specific assets may need my attention now.

As for the market today, we were expecting some early week/Monday price strength largely due to the IWM negative divergence as it has had had performance and as such, I would welcome a bounce in the IWM a bit to fill out SRTY positions and/or maybe IWM put (new ) positions. The SRTY position is up about +2.5% even though we haven't made the official pivot to stage 4 in this bounce's cycle. For a multitude of reasons, not the least of which being the Small caps should always lead a risk on mover and have been the worst relative performer, I really like the IWM short and would love a chance to fill out the SRTy (3x short/inverse IWM/Russell 2000) position.

In any case, after a quick check of the market after the last post, things seem to be coming apart intraday as was expected.

The NYSE Custom TICK Indicator is showing more odd looking volatility as the former trend through the bounce which was deteriorating is now looking like a sloppy mess. The afternoon intraday breadth has declined even more to the far right.

VIX Short Term futures which I was also going to update in VIX futures with the Index futures, I like VXX and UVXY (long) quite a bit here. I don't have much room to add without violating my own risk rules, but I'm not too worried about adding, I just like to se the position looking good here.

UVXY (2x long short term VIX futures) is showing nice improvement intraday (1 min) since the open today (green arrow).

The 2 min VXX chart is giving good confirmation of the same as are VIX futures.

The 3 min trend for UVXY remains very stable and strong looking which is why I have very little problem with the position.

As does the 5 min VXX trend.

As well as the 10 min UVXY trend; multiple timeframe and multiple asset confirmation.

 As for the 15 min chart of XVI (inverse VXX or short VXX which moves with the market averages), you can see the bounce/base area in white and the leading negative divergence in to that bounce since so all in all, I like this asset (VXX or UVXY long) quite a bit here.

 SPY 1 min intraday since this morning is starting to see a worse and worse looking intraday chart.

And that's clearly migrating from last week to longer term timeframes like the 2 min above.

Or this SPY 3 min leading negative very clearly

The Q's which have had, by far the most convincing head fake and just a few stocks (due to the way the NASDAQ is weighted) carrying the entire index on worsening breadth and volume is looking very dangerous for a sharp slip to the downside with a beautiful head fake/bull trap set.

 QQQ 3 min negative intraday as deterioration sets in.

 TQQQ(3x long QQQ) also confirming with a leading negative 5 min chart.

And SQQQ (3x short QQQ) which was one of the long trade ideas late last week is leading positive, again multiple asset and timeframe confirmation.

The IWM which is the one on Friday that looked like a bounce and thus was the reason I said it looked like we had a little more time in to early this week in the Week Ahead forecast, is in an ugly overall trend as you see above.

The 2 min chart is near perfect confirmation of the same divergences at the same areas.

 And the 5 min chart showing the same, but also the bounce for early this week which was part of the Week Ahead early week analysis.

The same 5 min chart's trend looks quite a bit different, thus if I can get any additional upside that makes an add-to entry worthwhile, I'd love to see it.

The 30 min IWM is leading negative since the bounce so I don't see much beyond a possible move higher intraday, being this chart is much stronger and higher probability, I'd want to use any IWM price strength to sell in to or sell short in to. We closed the IWM calls last Tuesday, they didn't gain anything above that the rest of the week so it was a seemingly early exit, but the charts pointed the way and it was actually the best exit we could have asked for.

In any case, I'll try to get the Index futures examples out, unless things start really taking a turn for the much worse.