Market Update

Everything is a bit noisy right now, but as I mentioned earlier, the upside intraday move didn't have much chance of going far unless it can create a larger base which would likely involve a head fake move making a lower low intraday.

Here's what we have so far, it's not a lot, but it would be the first chance the IWM has to put together its bounce as the head fake/support level we were looking for to be taken out as of yesterday has been taken out.

SPY intraday volume build up at the low and in line thus far, a pullback at least to the white trendline would give it a chance to forma base that it can get a better bounce off, more importantly the IWM. There's a very high probability even with a successful base area, that a lower intraday low would be created on a stop run move.

 IWM 2 min inraday doesn't look that bad all things considered so there's  a decent probability this base can hold water.

QQQ with the same short term volume capitulation leading to a bounce, but it will need more than that, essentially the same concept as the SPY.

And the IWM 1 min, not that impressive here, at least not yet.

The 2 min chart looks better.

Like yesterday and all week, sellers are firmly in control, I suspect the little upside break from the down channel will resolve with a move lower.

GLD / GDX Update

In yesterday's update, GDX / NUGT / GLD Update...

"GDX (Gold Miners) 5 min saw a larger volume event at the lows yesterday, often a short term reversal signal just like our Dominant Price/Volume relationship's, Close Down/Volume Up, tends to lead to a short term bounce the next day....I suspect GDX will break out above the base neckline again and possibly create another head fake move or bull trap.

This is the GDX 60 min chart with the important base neckline, I suspect a head fake/false breakout there, but just looking at the size of the reversal process, I DO NOT THINK THERE IS ANYTHING APPROACHING A REASONABLY SIZED REVERSAL PROCESS TO CREATE A REAL BREAKOUT, IT'S TOO SMALL, NOT ENOUGH TIME FOR ACCUMULATION."

As you can see from yesterday's post, a short term bounce was expected since yesterday in GLD and GDX.

Basically, yesterday's expectations for GLD and GDX are on track.

 GLD 2 min positives mentioned yesterday

GLD 3 min showing some weakness in to the advance, not a lot, but along the lines of expectations from yesterday's post.

The 5 min chart/base and likely gap fill target.

The 30 min GLD chart is still dominant as far as a pullback continuing.

GDX

 GDX was expected to pop back above the base resistance level as of yesterday, today it has.

So far the intraday 1 min is in line

As is the 3 min chart so no major weakness building in here yet.

The 5 min chart is a different story and shows the probabilities for resolution of this move.

The 10 min GDX chart also shows the same intermediate term pullback resolution probabilities.

The next trade as long as charts like this hold up will be DUST long, but still the larger trade idea is a pullback in GDX that we can buy at a deep discount.

So far, nothing much that wasn't expected

Quick Update

There are very small intraday 1 min positives in the averages and Index futures, but this is not anything that can lead to much more than an intraday bounce unless it builds a larger base, right now I'd consider it noise.

Market Update

Things are still looking bleak for the market this morning/noon as there was some pretty significant damage late yesterday as well as through all the week, I suspect there may be a change later in the afternoon, but I don't have solid evidence for that, other than the IWM's mid term charts which would suggest a bounce still in the IWM, which as of yesterday, I was only waiting for a move below support which already occurred on the open.

The tone is decisively risk off as the TICK Index is hitting lows of -1600 which os very close to the lowest I've seen.

 SPY / TICK Custom indicator has been bearish all morning.

This leads me to believe either we'll see a short term oversold event as I suspect because of the IWM or the market has just broken.

 SPY intraday has been in line with the downtrend this morning, which is pretty significant confirmation, it leads me to believe we'll hit an oversold status soon or a capitulation selling event, or as I have been saying, we are in the red zone, a broken market really could occur at anytime which is why I refuse to move any core shorts for trading reasons, it's time to stay with the macro trend unless an unbelievable opportunity pops up.

 3 min SPY, as has been the case all week has shown very strong distribution trends ever since the bounce started. Note the rounding look of the SPY since the bounce this week, this is VERY toppy behavior.

 SPY 10 min larger view, the toppy behavior on a larger basis.

Here's a closer look at the 10 min chart, there has been a lot of damage done, it's much worse on longer charts, but it is the intermediate and short term charts that are signaling timing indications for the macro trends.

QQQ 1 min intraday also in line with the drop of over -.80%

The 2 min chart's trend since the bounce this week, immediate selling on any strength, I doubt this was the original plan, but as the F_E_D gets more aggressive with its message and messengers, I suspect timelines for set-up cycles have been moved forward and we are very close to an AAPL like decline in which the hedge fund herd breaks up and moves to an "Every man for himself" attitude in which selling first and fast in the priority.

 QQQ 5 min really shows the extent of bounce damage which is to say the extent of distribution/short selling on any strength at all.

IWM intraday like the other averages is in line as well, I'm waiting to see if this changes since the support line I expected to see break yesterday before an upside move has done so.

This is the 1 min chart zoomed out so there is still a good case to be made for an IWM bounce, the yellow trendline is the head fake area I have been looking for, but I would not say we have strong accumulation of the move as of yet, although this chart pushes probabilities in that direction.

 IWM 5 min also hints at a decent move higher.

We even have a positive IWM out to 10 mins that has held up.

The 60 min is the direction of highest resolution, my SRTY position is at a decent profit already.

And the TICK thus far hitting -1600 and the trend clearly has sellers in control.

A Few of the Momos

I'm trying to wait for the most opportune moment to look at entering some of these assets I've included below, but most are already in a good long term position for an entry, I just don't want to get caught with a R2K bounce . This is one of the reasons I have maintained core short positions in SRTY , SQQQ and FAZ as they cover a pretty decent swath of industry groups.

However just to give you an idea of what some of these are looking like...

 FB 15 min

NFLX 15  min

TWTR 15 min

Z 30 min

BIDU 15 min

AAPL 30 min

AMZN 15 min.

They have all seen a lot of damage during this week's "bounce" period.

Macro Leading Indicators Fallen Apart

Note I said, "Fallen" rather than "Falling". Earlier in the week I posted Market Breadth charts which where a horrendouns mess, here's an update on Leading Indicators.one of the most notable signals is the decline in High Yield Credit as it is the Institutional equivilent of a momentum stocks. These kinds of signals are what we first started using the Leading Indicators layout for in the first place, not small day to day moves, but larger macro trends.

 High Yield Corp. Credit, the trend in this often used lever to ramp the market has clearly fallen out with the market, not on a short term dislocation, this is a massive unwind of Risk on/ High Yield institutional positions.

This is HYG intraday, I was surprised it didn't help ramp the market this week, but with my expectations for the IWM with a move below local support...

And with a short term volume event intraday in HYG, this may bounce to help lift the Russell 2000, but this is not a trend that HYG is likely to recover from, which tells us something, as the saying goes, "Credit leads, stocks follow".

The same is being seen in high Yielding Junk bonds/Credit intraday as well as...

A longer term massive dislocation from the SPX, this is telling us institutional money is moving out of the last of their risk exposure. If you look at the charts close, you'll notice the most serious part of the decline started July 1st, the first trading day after Q2 Window Dressing ended which should tell you something about the myth smart money creates for their clients about their positions and the reality that they move back to as soon as the quarter (reporting period) ends.

 Closer to home on the timing front (even though these too are massively dislocated), professional sentiment is turning south on this week's bounce.

 This is our second institutional sentiment indicator, there's a clear transition from confirmation of the bounce early on this week to outright selling.

Again, the NASDAQ Composite (all NDX listed stocks) is not only seriously dislocated on the Advance / Decline line, but even more sharply recently, much like the breadth indicators I posted Tuesday night.

This should really have you thinking very seriously about the composition of your portfolio at this point.

A.M. Update

Conventional wisdom seems to be that Obama's new Russian sanctions caused a major risk-off sentiment overnight, the is certainly true for Russia where the market is hitting 6-week lows and the apparent Russian jet shooting down a Ukraine jet obviously aren't helping tensions. However I think yesterday's added F_E_D hawkishness was a  major shift in US markets as rate hikes are being pulled forward and much more aggressive.

Espirito Santo's dead cat bounce yesterday seems to be over already and contagion risks back on the European table.

MSFT's layoff of 18,000 employees ( 3 times more than expected) hasn't helped either.

This morning's Initial Claims came in at 6 month highs, but once seasonal adjustments were applied as I mentioned yesterday (the unemployment rate is the easiest to manipulate) the 47+k print, the worst in over 6 months ended up beating at 3k lower than last week!

As far as what the risk catalyst has been (I suspect I know as you know ...F_E_D_) the market has not been responding well.

Take the bounce for this week thus far, here's the tone in the SPY and QQQ

 SPY 3 min chart since the bounce started has seen pure distribution

 The SPY 5 min

Here's yesterday's weakness building in quickly in QQQ 3 min

And the overall QQQ 5 min chart since the bounce started this week.

The IWM continues to be a different story.

 Yesterday's intraday IWM 1 min chart with strong improvement.

The overall 10 min chart still in a reversal process base and ready to spring.

Yesterday I said a move below support was all that was needed, this morning...

It looks like we'll get that so I'll be looking for bounces on an IWM bounce to short in to as this market is falling apart at the seams.