The Week Ahead

It may be a little early for the week ahead post, but there's only so many outcomes and so far today it has looked (including the rest of this week), like there's a bounce set up and in place and a bounce early in to next week looks like the most probable outcome, however for the first time in a while with a divergence of this size in terms of days, it also looks like if things go wrong over the weekend, which is obviously the biggest market catalyst, that there's not a whole lot committed to a further bounce and the cycle could be run over without too much damage. Usually only intraday charts are run over. I'm not trying to hedge my bets here or analysis, I'm just telling you what I see.  For instance, HYG has been employed to help out and a short term additional bounce from Monday's lows, looks probable, but not to the degree that we have seen in the past, thus limiting downside risk by not having much invested.

 HYG 3 min looks very impressive and looks like  the highest probability early next week is a bounce, perhaps a pretty impressive one.

I'm not sure how you get around the wild card of Greek elections, but that's the 3 min chart and the thing to remember is it's a 3 min chart, not a huge investment as the 5 min chart sees no accumulation.

 5 min HYG chart/trend.
Leading Indicators continue to look like a strong bounce is the most probable short term outcome early in the week, however the SPX:RUT Inversion is either telling us that one may not participate, or the bounce will be short lived no matter how impressive it may look.

As  for the charts, this is perhaps the best perspective of short term /early next week and primary trend, the primary downtrend is by far the highest probability and any bounce should end with a new low eventually being made below last October's low.

 The SPY's strongest chart that is solid is the 3 min, again short term indications, but looks good.

Put that same timeframe in perspective and you can see any bounce attempt since the May head fake has eventually been shot down and the SPY has made a new lower low, I don't expect any different next week.

 The primary trend daily chart shows just how bad things have been throughout 2015 and that's why we are seeing the downside we had not seen before this, this chart would need a half a year to repair itself, it's not going to happen.

The QQQ bounce chart goes out to 10 mins, but again...

In perspective, every bounce in the Q's has been met by strong distribution and lower lows since the May head fake. I don't expect any different, thus the bounce becomes useful for the very reasons cited when closing Puts earlier in the week.

 The daily chart needs no interpretation.

The intraday IWM is in line now so maybe I may take some short term position action before the close if things improve, but I'm not letting go of any core short positions.

The 5 min chart and a sort of "W" base are the strongest the IWM has.

In perspective, there was a decent accumulation area that ran the R2K higher for a while, that ended wit strong distribution in to the red area and we have a new leading negative low, so once again, things must be kept in perspective. A short term, even incredibly powerful bounce has the same downside fate.

And the daily IWM needs to explanation. This is the highest probability primary (bear market) trend. Thus I wouldn't bet against charts like this for very long.

I still put probabilities on a bounce early next week and if it's going to add to this week's: SPX +.81% ; Dow + .68% ;  Russell 2000 +0.11% and NDX +1.09% I'd expect it to do so with some gusto. However one way or another, whether the market responds badly to the vote Sunday or the bounce runs its course, I believe we'll be headed this way in very short order...

 October lows and a break below.

This may seem like a stretch, but remember that bear markets fall about 2.5 to 4 times faster than bull markets rise because fear is stronger than greed.

Many may not even be aware of it yet, but take a closer look...

The SPX is already making lower highs and lower lows on a primary trend basis.

Once this 200-day sma is broken...

Things take on a whole new perception and urgency.

Just like the October lows made the initial break, back in 2007 we had an initial break, then a slowly creeping set of primary trend lower highs and lows that few probably noticed, then things fell apart quickly once fear really grabbed hold.

I'll be watching the rest of the day for any additional color for early week movement, I'd still tip my hat to a bounce, but I can't foretell how events in Greece play out, we are in uncharted waters as they are the first developed country ever to default to the IMF now in the ranks of Sudan and Zimbabwe. As far as how that ends, well I think the case has been made for sometime as you can see by the 3C charts that show a trend view-every bounce is sold.