Last night I showed you the short term charts of yesterday's action which started out very strong (with regard to 3C underlying trade), the rest of the afternoon those charts almost all deteriorated, I was very interested today to see which way these short term charts would go, if they continued to deteriorate badly then we would likely be close to making a new, serious move lower, however if there were to maintain or improve, then the chances of some upside noise within the trend becomes more probable, but that also allows us to enter positions to trade with the trend at much better prices with far less risk.
The deterioration in the charts late day yesterday carried over in to price today as we'd expect, but much of the underlying 3C trade activity today in to lower prices (at least in the short term -day or so) became stronger as the afternoon went on.
**UPDATE-AAPL's earnings aren't impressing anyone and the real item that counts, guidance is lighter than usual and that's saying something for a company that always guides lower.
Th short term charts still have several short term positive divergences and we still have a long night ahead of us, we'll see whether we get the short term move up that many of these charts seem to indicate, the longer term and more important charts have stayed negative and that's what we expect the trend to be, although it will be scattered with noise here and there/counter trend moves.
Here are the charts for the major averages as of the close...
DIA 1 min stayed leading positive all day. What is impressive is that the 3C positive leading divergence didn't make any lower lows with price.
The 2 min chart was negative at the bump up in price yesterday afternoon, from there the selling took the DIA lower as there was no institutional support, but they seem to have stepped in and in stronger fashion as the day wore on, as you can see the positive divergence kept moving higher. A lot of times the 1 and 2 min charts are indicative of middle men loading up their account in advance of a known move to come, they are the buyer/seller of last resort on a market order and before the advent of HFT, about 30% of any given stock's volume per day was either the market maker or the specialist trading their own account. In any case, thy fill the larger orders so they typically know what's coming down the road. To me this looks like some stocking up for a move higher (still noise), but not so much as to change the trend assumption. As I said last week before a move down even started (as we were looking for that to be the next trend), nothing moves straight down or up and there's unprecedented volatility, ATR and game playing in this market, we have to expect counter trend moves with in the trend.
DIA 5 min relative positive
ES leading positive at a new high on the session.
IWM 3 min leading positive divergence
IWM 5 min leading positive divergence
QQQ with a strange initial leading positive move, followed by downside and an even stronger leading positive move very close to the EOD.
QQQ 1 min close up of just today.
QQQ 2 min is leading positive, but again most of the leading action was late in the day and very fast.
QQQ 5 min relative positive divergence-this would suggest (at least at this point) the stronger positive divergences on the shorter timeframes have begun to effect the 5 min timeframe, but the shorter timeframes are not yet strong enough (and may never be) to move the 5 min higher than a relative positive divergence which is the weakest. It could also signify that any move to the upside will indeed be weak, it may not appear that way in price initially, but the strength and duration of the move are kind of capped by the divergences' strength.
SPY 1 min leading positive
SPY 2 min leading positive
SPY 3 min relative positive followed by a leading positive move.
SPY 5 min relative positive followed by a leading positive move.
