ES Update

Ironically ES is seeing its first leading positive divergence of the day, perhaps including the entire overnight session, CONTEXT is also going positive and I grabbed a chart of High Yield Credit as well with a short term positive in it.

 ES making a leading positive divergence, now well above the noon readings, actually higher than anything seen in regular hours trade.

 Also CONTEXT's model is going positive, higher than ES is (time delayed).

HY credit isn't making the lower lows intraday that the SPX is making here, it's making higher lows, strange for HY credit to be acting like that with the SPX making lower lows, seems something is up, still if it is, I expect it's near term games and short term noise.

AAPL as the Fulcrum for trade

If not for tomorrow, at least for overnight and perhaps the early trade, although it could be a fulcrum for longer than a day.

Here are a few minor, but noticeable changes in AAPL today, right when ES is starting on its first leading positive divergence of the day.

 At first this 1 min chart just looks negative, but zoom in to this afternoon's activity...

 And you can see as AAPL make a new intraday low (always have to consider the head fake), 3C 1 min is making a series of higher highs, it may just be a 1 min timeframe, but it's still a change.

 The 2 min time frame is in a leading positive position, actually pretty impressive for this chart alone.

Now the 3 min is seeing some migration and has started a relative positive divergence.

I still would not choose to trade AAPL earnings, but if I HAD to guess, I would say AAPL may be used as a short term positive fulcrum in the market, followed by the earnings being looked at closer and the market giving up any gains.

USO Possible EIA Energy Report Leak

The report comes out tomorrow at 10:30 a.m. EDT, here are the USO charts, this would be a very speculative trade as well as short term.

 USO 2 min from negative at the top to lateral the last 2 days with a relative positive divergence

 USO 3 min with a leading positive divergence at yesterday's open as USO continues sideways (often where we see accumulation and distribution).


The 5 min chart is mostly in line until the open yesterday where it is at a relative positive divergence followed by a leading positive divergence and is yet to make a lower low. I'd consider this a speculative, short term long trade.

Financials follow up

Here's the closed FAZ position, I normally would have held this, but seeing I wanted to enter a FAS position it didn't make much sense (a VERY short term hedge?).

 Faz at nearly a 12% profit as a straight long (no options), I think it has more to go and will look for a better entry.

 Here's the Financial Sector today on a 1 min 3C chart in a leading positive divergence.

 Financials with a 5 min leading positive divergence-remember last night I was very interested in which direction these short term charts would go.

Financials larger trend is definitely negative, however the 15 min chart even shows some sign of a leading positive divergence at this level, it doesn't look like any kind of threat to the overall trend, but again, noise in the trend.

 FAS is a 3x leveraged long of Financials so it should look similar to Financials above/XLF. The 1 min chart in a leading positive divergence

 The 2 min in a leading positive divergence, remember the market is fractal in its behavior and almost all reversals are preceded by a head fake move, a move below support would pull in some shorts that could later be squeezed for a move higher.

 FAS 15 min trend is in a leading positive position.

 FAZ is the 3x leveraged short for financials, it should look the opposite of XLF and FAS above. The 2 min chart in a minor leading negative divergence, it doesn't look like a big threat, but it does look to be enough to create some counter trend noise.

 FAZ 3 min has a very strong base with a great positive divergence, but the recent movement looks like FAZ wants to consolidate. The base should allow FAZ quite a bit more upside when all is said and done.

The FAZ 15 min isn't horrible, but it's not confirming either, for these reasons I think the most likely near term move in FAZ will be a quick move down and FAS a quick move up. I'll be looking to re-enter FAZ on price weakness and 3C strength.

FAS position is smaller-All longs are speculative for me

I think you need to be very nimble to trade FAS long here.

Charts coming.

Closing FAZ long position -Entering FAS long position

Market Update

Keep in mind that these market updates can very well have a lot to do with AAPL's earnings, IT DOESN'T MATTER WHAT AAPL'S EARNINGS ARE, the market can create short term sentiment any way they need it to get the position they want to get off. If Wall Street wants AAPL earnings to be taken as positive, they have many ways of moving AAPL higher (market makers and the bid/ ask; phantom flash quotes; short term accumulation in the open showing volume; CNBC -Yes I'm serious), so always think in terms of the bigger picture. We know the evidence still points to the next trend that already started as being a down trend, but we did expect there to be upside noise and head fakes even before it tarted so don't be surprised, just use these moves to your advantage whenever you can.

Intraday there looks like there will be an afternoon reversal, the media will likely play it up as AAPL excitement, but there's almost always a meaning and a reason for these moves even when they aren't apparent immediately.

As yo can see and as I often remind you, reversals are almost always a process, not an event. As the market is fractal in nature, you have to scale the reversal to the timeframe we are dealing with, that's why I didn't feel late putting out the XIV idea a member asked about, there's time (more often more than you might otherwise think).

My original expectations from yesterday morning and last week...

 Here's the bear flag in the SPY, nice and obvious. As of last week our trend projections were for a shorter term trend (relative to the other trends) to the down side, but it would include noise, not just be a clean move down. The short term trend would likely break below the bottom of the bear flag drawing in new shorts. As of yesterday morning I suspected we'd see a move inside back inside the bear flag as part of the noise and shakeout, I expected this to be at least a 2 day move even though we entered the bear flag yesterday. We could still see volatility in to both gaps or even at a new high, the point is the pullback move will eventually hve to be strong enough to convince shorts the next leg down is starting so we'll have to see a deeper move below our current lows.

Our next trend we expected was the continuation of the sub-intermediate trend up, it would likely move above the bear flag in a very volatile manner with short covering including new shorts that aren't in yet on the break lower we are still expecting in the short term trend.

Finally the long term Primary trend down would re-emerge and we'd see new lows in the market, we are still a ways off from that and I suspect at a noise area of the short term down trend or extreme pullback move, it will need to be convincing to bears who have been chewed up recently so it should be quite ugly on the downside when all is said and done.

Here are the gaps and in white the new high, these would draw in longs and on the return move down (as this would be noise within the trend), the longs losses and selling would accelerate the move down, which is what we'd like to see to give shorts confidence to enter the market so they can later be squeezed as well.


As for the market updates...

 DIA 1 min has remained in a leading positive position all day today, this has migrated to some longer term timeframes.

 The DIA 2 min is also leading positive intraday today, this suggests a decent intraday/ day to day , move up from these levels, the current price action os relatively flat, this is to be expected before a reversal as few reversals are "V" shaped.

 Even the 5 min DIA is in a leading positive position today after going negative yesterday afternoon, last night I talked about these short term charts and how they would be important in understanding near term direction within the trend, thus far it looks like we'll see a move higher in to the close or in to tomorrow or both.

 Ultimately though the trend's firewall is still standing firm as a leading negative divergence on an important 15 min timeframe. Despite whatever noise we get intraday or day to day, the trend we should see at the end of this should be a pretty ugly looking move down.

 IWM 3 min leading positive divergence today after yesterday's ugliness.

 We even have a 5 min leading positive divergence today in the IWM, this could build to be stronger with a little more sideways or down price action.

 The 15 min IWM chart is the negative divergence firewall and represents the trend we are looking for once noise is removed, but it is the noise that has been the meat grinder for many traders I've heard about on the StockTwits stream, this is why yo either are trading nimble like some of the trades from today and yesterday or are looking at the longer term and not letting the noise throw you off.

 QQQ 1 min leading positive today

 Also a 5 min positive divergence that has the start of a leading positive move (leading divergences are much stronger than relative divergences).

 QQQ 60 min as shown yesterday is leading negative, this as well as some shorter charts represent the trend without the noise.

 SPY 1 min positive and slightly leading positive divergence today in to lower prices, in other words, lower prices seem to have been accumulated, only to be sold at a move higher.

 SPY 3 min from a relative positive to a leading positive divergence as the SPY moves lower.

SPY 15 min firewall shows the trend and the leading negative divergence.

Understand the timeframe you are trading and don't let other timeframes get in the way of your trade. I prefer to keep leveraged trades short and move out quickly, longer term trades I prefer to use no leverage and will sit through noise with those.

UVXY Follow Up

Here's the reason for closing out the UVXY call position I opened late yesterday, remember this market is like a meat grinder with the intraday volatility, I don't mind sitting that out in a non-leveraged position, but with leverage I'd rather just move out of the position especially with a profit. Also this will show you the most likely longer term trend for VXX and UVXY, it's what we expect for our market trend expectations.

 With a 32% profit in half a day, I am fine with closing the position.

 Nearly the exact opposite of XIV, the 1 min chart of UVXY started to lead negative intraday, with XIV confirming with a leading positive as well as the market averages I will update next, it made some sense to go ahead and close this position here.

 The UVXY 2 min chart is in a relative negative divergence, this to me looks more like a correction of some type is likely, remember last week before the pullback move started I reminded you there' so much volatility in the market that there will be a lot of noise and short counter trend moves to keep everyone guessing and try to hit as many orders and stops as possible, if you have a longer term play based on the trend, just keep your eye on the longer term charts.

 The 3 min trend shows a large positive divergence, UVXY should give up quite a bit of upside from this trend, however that doesn't mean it's all one way or straight up.

 The 5 min chart is also at a relative negative divergence, a relative divergence like this is the weakest divergence there is so it doesn't look like there's any heavy underlying selling going on in UVXY, but more short term stuff for a short term correction.

 Now we are starting to get in to the timeframes that are showing us the trend of UVXY when the noise is removed and also as UVXY trades inverse to the market, the market trend as well, which we already expected to be down for a pullback, but an intense pullback. The 15 min chart has a large base capable of supporting quite a bit of upside in UVXY and right now we are in a longer term trend leading positive position.

 Look at these 30 min above and 60 min below, 3c charts on UVXY go, the last time I remember these timeframes lading positive like this we were entering FB at the bottom.

XIV as a Quick Day Trade- maybe a little more

If you want to play a counter trend move on today's intraday action, XIV was asked about and it looks like it is ready for a move up, but you need to be nimble, this could very well be a simple day trade, we have to see how the charts develop, but here's what we have now...

 1 min leading positive looks like someone knows the intraday direction is about to change and there are other 3C charts I was about to post along these lines.

 There's no positive divergence on the 3 min chart so I would consider this a very short term trade or a day trade for now.

 The last positive divergence on a 5 min chart produced a small move up, now that there's 2 we may watch this as a potential longer trade than just a day trade, but as I said, we will have to let it develop and confirm.

At 15 mins the trend is clear, it's very negative so I would make sure you understand this is a speculative trade, you need to be nimble and it's likely a very quick trade

Closing Yesterday's UVXY $8 Calls

It looks like an intraday bounce is coming and there's a decent profit in the position.