Close to Blast Off and Systems Trouble Starting Again....

This is the technical pattern (intraday) I just got through posting and why (TLT/VXX/HYG), note the SPY has recently had some of the best short term underlying charts "RELATIVE" to the other averages, just like the week the IWM has the best relative charts and outperformed the other averages whether they gained on the day or lost on the day.

 Just as the intraday charts posted in the last Update were showing an inverse H&S intraday and a nice positive divegrence - also intraday ( 1 min) like this SPY above, something started to change. Whether this makes a 3rd day or not, which would not be helpful to VXX/TLT's cause of accumulating a stronger base , some fast moving charts started to show the start of more "strange events" like Thursday/Friday.


At first I suspected that this candle (at the white arrow) would turn in to a bullish hammer intraday on higher volume and stem the downside, but it didn't, next stop is the intraday lows as support. I suspect this will hold together unless the signals below keep going in the direction they are going.

Here's the 1 min QQQ and roughly the same intraday inverse H&S price pattern, but note the negative divergence just as it tried to breakout. This wasn't such an interesting event, it could have been the other averages weren't ready as they get more boom for the buck when they move together, but...

 This QQQ 2 min chart started looking an awful lot like last week's strange signals, not as deep or nasty, but I have wonder if that's simply because they are just getting started, I'll repost the most recent chart (the above chart) at the bottom of this update.

 The red vertical line if Friday's cash close, so you see the intraday technical price pattern (Inverse H&S) being formed, then this deeper leading 3 min negative just like last week at least early on.

Then the intraday 1 min IWM started in as well

To put it in context since last week, this is what it looked like just prior to me starting this post.

This is the QQQ's (as it is the worst) very latest ...

This is a little worse than the first capture above, if price breaks the intraday lows, then we may have a different short term outlook on our hands.

If these get worse, like last week's I'll post them, but this is not what I was expecting to see as an intraday inverse H&S was complete and ready to go.

Market Update

I was trying to get this out ASAP, it's a lot of charts to capture though. I have one alert set for news updates in Google that come to my email, the keywords "Greece and Troika", that just may be the Lehman of this market. A market that already is stretched and stressed and I'd call this both (examples beyond the charts in actual hard number form that is not left open to interpretation would be nearly half of all stocks below both their 40-day and 200 day moving averages, or in other words, about half the market's stocks already in a bear market) takes very little in the way of an event that breaks it, in 2008 it was Bear Stearns and Lehman, the market wouldn't have broken on those events had it not already been stretched.

Some of the evidence that Greece may get to the market before the F_E_D rate hikes (either will do the trick) can be seen in the periphery of the European nations' and their bonds, there's renewed concern about contagion, but not like the contagion that's already taken place in which the EU is for all intents and purposes in a triple dip recession, but the kind of mass defaults starting with Greece and it looks like the countries that bond traders are worried about next are Italy and Spain.

In any case, earlier  said I thought the market wasn't done with early strength on a gap fill, but it looked to be "Technical" in nature (not much or any support, but technical trading/buying or selling ) and I thought that had to do with the need for a pullback in TLT and VXX so they could continue their recent trend of accumulation (at the same time the market was showing us that unusual weakness) and HYG being the 3rd asset (the first two move opposite the market so accumulated VXX and TLT moving higher pressure the market lower), with HYG it leads the market as a lever so HYG distribution sending it lower pressures the market lower.

I could see the technical pattern forming before I could get all of the charts captured, I'm hoping I can get this out before any price movement, but it's not really that important as it's exactly the same as the "technical" that was posted last night in Futures Opening... which puts it in perspective. Here's the chart from last night's post and the "Technical" forecast from last night for today, but in context of the broader market.

This is the 5 min NQ chart from last night's post linked above and this is what was said about the chart above and the white arrow to the far right, the "Technical feature":

" This 5 min chart of NQ is much more along the lines of what I'd look at, in fact I won't trade an average/Index unless I'd trading in the direction of the 5 min chart in Index futures, thus the leading negative divegrence in NQ through Thursday/Friday (in white below) is obviously of some interest. While I'd normally doubt an extended fall just from normal price action behavior from here, there is a small positive forming right now, but in the big picture of the charts I'm showing you, it's not a defining feature."

This is akin to the "Technical" I mentioned this morning, but having a larger purpose, which was related to HYG, VXX and TLT.

Here are how those charts have formed up this morning and the "technical" feature that helps VXX/TLT and should continue to turn HYG.

 This is the QQQ 2 min chart with a small intraday positive divegrence today forming a technical trading feature, it's a little difficult to see, but it's a small inverse H&S.

This is the same 2 min QQQ chart as above, just in context with the strange and strong weakness from last week, in yellow I did a bad job of trying to draw in the inverse H&S , a technical feature, meaning technical traders will react to it as a technical trading pattern, you can still see even on a short 2 min chart its size or importance in context, just like the NQ 5 min chart from last night.

It looks like a means to an end, but probably not the means or end that you might think as it does appear to be a bullish intraday pattern,  as I said earlier today, for VXX and TLT to continue to be accumulated, smart money is not going to chase prices higher, they'll look to pull them down lower and buy on the cheap, being VXX and TLT have a near perfect inverse correlation, it's not a surprise this technical pattern has showed up as even before it did, I said I thought the early strength today was not the gap fill, but would be of "Technical" nature, which is kind of like saying the only reason to chase or buy it is because it is a bullish technical price pattern, not because there's a strong reason or underlying support for the move, it's the means to moving TLT/VXX lower which I believe is the end( accumulating them at lower prices).

 If you want a broader, less noisy look at the trend, just follow the 10 min QQQ chart's price trend roughly moving like the green arrow and the 3C trend in blue or with the blue arrow. This is through the entire 2015 congestion or choppy trading range.

TLT 2 min with a strong leading positive divegrence, note that this is the same days as the unusual weakness in the charts from last week.

The larger, more important 10 min TLT trend with a much stronger positive divergence, beyond that and we get in to a more complicated discussion I've already touched on having to do with when the F_E_D hikes rates and the apparent move to reduce duration, that post is here...Treasury Futures/ TLT Update

 VXX 2 min intraday , as it trades almost perfectly opposite the market, has a small intraday H&S top as opposed to the market's small inverse H&S bottom, don't let the terms of H&S bottom or top cause too much concern or fool you, they are intraday.


However again, back out and look at the very same 2 min VXX chart and something different appears in context. Remember the dates for the bases in the market and bounce attempts (Jan. 6th, Jan 14-16 and Jan 29-Feb 2nd), look at the timeframe for the negative divergence in the VXX 2 min chart to the left, 29th through the 2nd and the positive leading divegrence now at a new leading high.

 Just like looking at the 10 min QQQ chart and 3C / price trends, take a look at the same for VXX/ short term VIX futures, price is rather flat, actually a large ascending bullish triangle and 3C in an uptrend, the opposite of QQQ and exactly what you'd expect to see as confirmation of QQ's chart.

 VXX's stronger 10 min chart showing the end of the market's base for its bounce on the 2nd with a negative in VXX and a leading positive at a new leading high in VXX, a lot of that during the last 2 days of last week with the "unusual" charts.

 As for HYG, it's a ramping lever, it tends to lead the market both up and down. Note how HYG has been activated through the entire time the market has formed it's bases and bounce attempts, I don't want to take this too much in to interpretation, but you do have to look for the message of the market and if HYG is needed to move the market and it keeps (the market) flipping back and forth between green and red YTD, there's some trouble in the market.

The bigger point though is HYG's leading negative divegrence on the chart and although I didn't want to draw across the entire chart, the divergence starts at the highs to the left and ends at the right arrow's point, a large relative divegrence.

HYG's 10 min chart, relative to the "strange activity" Thursday/Friday of last week, not only where the averages showing strong negative signals, but HYG is as well at the same area in addition to the larger trend for the 2015 range.

USO Update

I don't ever want to gloat, I've had my share of bad calls and that's when the market slaps you the hardest, but there is something about Cramer "Smelling a bottom" in oil as well as everyone else coming out and calling a bottom just because of a 20% move in USO and this on the same day we were calling for a consolidation (through time or price) in USO.

Here's a follow up of where we stand. I still think USO hasn't really scratched the surface of what a solid counter trend rally can do, I still think it's in a consolidation phase and will probably see the same bottom pickers of last week start to turn more bearish on oil for a short time and I'm guessing that's when USO will make its next move,  but I do not (as I have said throughout) see this as a true bottom, but a counter trend rally which will move faster and further than a real bottom, it just won't hold it.

 Intraday today (1 min ) USO, there's a negative leading divergence in place, a gap fill would be an obvious target based on this chart alone, but we have more.

This is the consolidation since our call last week for one, it has ben partly through price (initially) and then mostly through time (price has roughly moved along the path of the green arrow laterally).

The divergences here are more of the finer lines showing the movement within the consolidation.

Note the shape the consolidation is taking on, a bullish ascending triangle, which would be the right consolidation pattern for continued upside, however if technical traders are picking up on this too, look for a head fake move below the triangle, this would be a high probability / low risk entry in USO long for the next leg, but as with any pullback we'd want to confirm the accumulation of a head fake move.

If we saw a head fake move and I'm suspecting it more and more as this ascending triangle becomes more evident, than it should look something like this and the highest probability / lowest risk long entry would be in the head fake move's area.

The white arrow is the expected path from a technical analysis point of view, a breakout to the upside as the apex of the triangle closes, the yellow arrows would be the higher probability head fake, below the triangle where any stops would be placed and turn traders bearish on USO, followed by the accumulation of lower prices and an upside breakout, it's the move below the triangle we'd want to verify as being a head fake move and that would be the highest probability/lowest risk entry, all based on the predictability of Technical traders and how Wall Street uses that against them.

A third option would be a Crazy Ivan, a breakout to the upside first drawing in new longs followed by the rest of the move already drawn in, a move below the triangle stopping out the new longs, allowing Wall St. to pick up shares on the cheap and turning traders bearish, followed by the upside breakout. Even in this case, the entry would still be the downside move so long as we confirm it is a false move and that means there would be accumulation/positive signals on the move lower (Wall St. accumulating the shares on the cheap).

If you are interested, I'd set price alerts for both scenarios.

 This is the 5 min chart, it doesn't show any major damage and looks like a consolidation.

 The 15 min chart with the original positive at the lows sending USO higher, which also was a head fake move and the relative negative divergence of a consolidation, but nothing too much worse than that.

 The 30 min chart has more than enough gas in the tank for additional upside.

As does the 2 hour chart showing the original distribution sending USO lower and the current positive.

Although you could enter or hold USO right here, the highest probability and lowest risk would be below the ascending triangle, it's the hardest to buy emotionally, but that's why we look for the evidence of smart money accumulating the break.

Quick Market Update

The "Early strength" in Friday's forecast for Monday followed by afternoon weakness, I believe, even though we've seen some already in the form of gap fills for the most part, is not over yet in my opinion, here's a simple example.

SPY 1 min intraday with a small positive to the far right, we saw this in the 5 min NQ chart/Futures last night with the broader picture being a negative roll over of 3C, which is why I termed early strength as more technical than having a real fundamental base.

I'm starting to suspect it has more to do with pulling back assets like TLT and VXX which are showing signs of accumulation (negative for the market), yet they need to pull back to continue building those positive divergences (also mentioned last night and this morning in 30 year treasury futures), and I suspect as they build their strength, that's what is behind later (afternoon) weakness as I had put it Friday afternoon.

The key assets that I'm paying most attention to are TLT, or Treasury futures (long end), VIX futures and VXX and HYG.

I suspect the "technical" early strength, has more to do with building bases up in TLT and VIX futures than anything else, which would have a pretty negative message for the market, but that's already pretty clear from the charts posted Friday and really clear from the 5-10 min charts posted last night in which the trend of 43C deterioration is about as clear as you could ask for.

A.M. Update

Good morning,

Tone of market action is definitely on the Risk Off side this morning with the German Dax down over -2.5% after the weekend scrap with Greece in which Greece has made their position perfectly clear, they will not back down or compromise, they will not seek more bailout money or an extension to the current agreement, they even went so far as saying the ECB  has failed with monetary policy and the Troika structure must end, which is a little off topic, but nonetheless bold.

There's talk of this hitting the EUR/USD particularly hard as a Greek Exit is more and more on Europeans' minds as they continue to pivot toward Russia which always seemed the natural course in this stand-off, especially once they lost the upper psychological hand with the EU after some initial dilly-dalying in talks.

In addition the Ukraine peace talks are going nowhere fast and are exposing fractures among the US and European allies in the process.

Chinese Exports were reported in near collapse with Imports weaker than expected which is not surprising as the Baltic Dry Index hits new record lows below the 1986 low of 554, which is the price to ship a ton of dry goods whether metal or grain, so the Chinese import/export print is not surprising in that sense.

It was a bit hard to tell what the early week ahead would look like, I suspected some early technical strength followed by weakness, futures seemed to suggest that last night, although not screaming it and I see the same thing this morning.

 As we saw in NQ last night and as suspected late Friday afternoon, it looks like some early technical strength, again, although not screaming and as seen last week and last night...

The bigger picture (TF 7 min) has eroded and there's a clear divergence from last week.

In addition as suspected, the 30 year Treasury is rallying off Friday's lows as the charts shopowed which fits with the chart above.

And the currency to watch as it has been in decline since the European open is the EUR/USD where some are calling for lower levels than parity, actually back to the lows of $.90 on a Greek exit.

We'll check opening indications, but the overall theme looks much more like weakness with any upside (early) simply technical.

Futures Opening...

While Greece did not implode over the weekend, the European alliances , especially with the US seemed to suffer soma major initial blows that are likely to grow deeper, for instance Cyprus will; sign a military cooperation deal with Russia that will put that Russian base in the Mediterranean , ultimately that's Greece's trump card as the Russians made clear going in to the weekend, funding to help Greece is available if they are asked. Beyond that the Minsk meeting/summit opened or revealed fractures between the US and key allies, Germany and France.

As for futures, there's some downside on the opening of Futures for the new week, here are the initial trends I see developing.

As for Index Futures, I don't yet see this as a imminent turning point, but after Thursday and Friday's very fast, very negative divergences, it's apparent this could happen very fast.

Here are a few timeframes showing the trend...


Given the strange, very fast, very negative action started Thursday in XLK/Tech and naturally QQQ as it is tech heavy, the NQ 1 min futures which I normally wouldn't pay too much attention to on a long overnight session, make some sense to look at especially because of the other timeframe trends in NQ over the Thursday /Friday period when signals went from bad to much worse in Friday's strange signals.

 NQ 1 min showing Friday's cash market in white and a negative divegrence in to the opening of NQ's chart tonight.

 This 5 min chart of NQ is much more along the lines of what I
'd look at, in fact I won't trade an average/Index unless I'd trading in the direction of the 5 min chart in Index futures, thus the leading negative divegrence in NQ through Thursday/Friday (in white below) is obviously of some interest. While I'd normally doubt an extended fall just from normal price action behavior from here, there is a small positive forming right now, but in the big picture of the charts I'm showing you, it's not a defining feature.

 The strong move lower of TLT Friday on the Jobs data sent yields higher which is supportive for the market, still the Dow/SPX lost green for 2015 by the close, I showed TLT on Friday and how it (and VXX to a lesser extent) look to be putting together a positive divegrence, thus TLT up or in this case the 30 year Treasury futures, yields down and pressuring the market lower. This is essentially confirmation of the signals developing in TLT (20 _ year bond fund) seen Friday after the drop/gap lower on the strong jobs print. This is an important lever for the market, thus this positive signal is an important chart for us.


 TF-Russell 2000 futures on a 7 min chart which is a timeframe I have respect for and pay attention to are showing a VERY clear negative divergence (leading) through Thursday/Friday of last week where we saw the very extreme, very strongly negative signals starting Thursday in tech and QQQ, then spreading Friday to almost everything else and much stronger. This is another way of seeing that same action on a consolidated chart through the two days.

 CL/ Brent Crude Futures 7 min looks to be right about where I expected. I do think there's plenty of gas in the tank for further upside, but just as we said last week, as soon as everyone started calling a bottom and Cramer nearly top ticked oil with his "I smell a bottom" comment, we expected oil to consolidated which it has done since then, this chart would suggest there's still some consolidation to do which seems to be through time rather than through price, either way, it's right in line with our expectations and given how quickly retail went from bearish to calling a bottom on the start of a move, I suspect they'll be fully bearish right as USO/Oil is about to make another leg higher, but we will verify accumulation of the consolidation as always.

 This is NQ (NASDAQ 100) futures, 10 min. Again, there's a very clear change in character, a very sharp negative divegrence through late last week, Thursday and Friday especially. This is not 1 or 2 charts, but so far a trend and those days specifically in which we saw what I'd even call unusual activity/signals, very fast, very sharp, very strong.

 The 10 min R2K futures shows the same, but more importantly...

The 10 min 30 year Treasury futures shows the positive divegrence which sends yields lower on a price move higher and pressures the market lower, this is over all good confirmation through multiple timeframes and multiple assets.

There's still that small positive that looks like it may hold up overnight above on the NQ 5 min chart, but in the big picture of just the charts shown above, it's nearly irrelevant, perhaps even helpful.

I hope everyone had a fantastic weekend is is ready for the new week. I'll see you in a few hours!

Daily Wrap

So we close out the week with the SPX red YTD again and the Dow somehow perfectly at unchanged YTD.

We started the week with the concept of the head fake move, this is from a Market Update, Monday February 2nd...

 "With all of the major moving averages in the area for most of the major market averages, there are quite a few areas for technical traders to make moves, in addition, the descending triangle is coming to a point, the apex, so a price move is highly probable as we get to that point or just before.

Today's daily price candle is like a hammer, a bullish reversal (short term), it''s at support with a small shakeout below support, so in fact we do have the set up for a Crazy Ivan as the intraday low was the break or run on stops, it's the lowest intraday low of the triangle .

So the next move/head fake would be above the triangle like the last, when that is done, fails and leading indicators are giving strong signals with 3C, the next move should be to the downside below the triangle. The charts already assign high probabilities to this outcome before a move even gets started as you've already seen today and will see below."

Actually there were quite a few posts suggesting that the market move above the descending triangle that was in place. From a purely Technical point of view, a descending triangle (although this was not a textbook descending triangle) carries with it a bearish expectation of a break below the triangle. The little dip below the triangle on Monday (the lowest intraday lows for the SPY of 2015) at the white arrow on the chart above, would normally trigger one of two technical responses: either a stop run or a short entry, in either case both actions are sales (selling on a hit stop or selling on a short sale), this is why head fake moves are so common before a reversal, the reversal being this week's move above the descending triangle. In either case,  even a small move like that can cause a big gain in reversal (upside) momentum as new shorts are typically going to put their stop inside the triangle, usually right above the triangle's lower support trendline which causes a stop out or "Buy to cover" which is of course buying.

It was noted several times this week by several members who keep track of sentiment on some of the trading sites like Stocktwits or Twitter, just how fast sentiment changed from bearish to bullish, two days! Which brings an additional source of support in to play which are the traders (long) who were stopped out below the triangles' support, anxious to get back in long. Proof of the first concept was obvious as this week saw the Most Shorted Index saw it's largest 4-day gain in since Sept. 2013.

These head fake moves are real, they are common and they are useful. For a review of the concept, I have these two posts always linked on the members' site: * Understanding the Head-Fake Move Part 1 and * Understanding the Head-Fake Move Part 2

We also saw, much like yesterday, but to a much stronger extreme and a much larger group of assets, some VERY extreme 3C signals, Market Update-Something Strange Edition . While I'd have absolutely no proof of a leak, these very strong 3C signals preceded the Greek downgrade around 12:30 and the Greek Ultimatum around 2:35 today.

And again while it's impossible to prove, we see 1-day oversold and overbought conditions effect the close of the market the next day, yesterday's Daily Wrap said this about the internals and the 1-day overbought event apparent in internals and sector performance...

"the Dominant Price/Volume Relationship was across all 4 major averages and it was  Close Up/Volume Down, the most bearish of the 4 possibilities with 26 Dow stocks, 67 NDX-100, 871 Russell 2000 and 311 S&P 500 component stocks.

In addition 9 of 9 S&P sectors closed green with materials leading at +2.42 and Consumer Staples lagging at +.51.

In addition to that, a very overbought reading in the Morningstar Industry/Sub-Industry groups with 215 of 238 closing green, all in all a very overbought (1-day) condition that would usually see the next day close red."

All 4 averages closed red on the day with the NDX, the first to see those strange deep leading negative signals yesterday in Technology/ XLK, leading the way down today. 

Unlike yesterday's weakest of the 4 possible Dominant Price / Volume Relationships (Close Up/ Volume Down), today has absolutely no Dominant P/V relationship. Also unlike the 1-day overbought 9 of 9 S&P sectors closing green and 215 of 238 Morningstar groups closing green, today only 2 of 9 S&P sectors closed green with Financials leading at +.79% and Utilities lagging at a massive -4.12% on higher yields./rates.

Likewise the Morningstar groups only saw 80 of 238 close green, a far cry from yesterday's 215 of 238.

VXX charts were interesting with positive divergences today as I would have expected a hedge yesterday in front of the non-farm payrolls this morning, but today on an overall weak market, that smells like something else entirely. The TLT divergences were also of note, although so was the decline on the payroll data. In addition to the TLT divergences, the 30 year Treasury Futures also put in positive 3C divergences today.

While the jobs data seemed as if it would be the key pivotal macro data and probably was from an economic data point of view (it didn't take the market long to figure out good news is not good news concerning the Jobs print and the market, that it did nothing but give the F_E_D more reason to hike rates sooner), as I think we all expected, Greece is quickly becoming the pivot and although I said earlier this week that I don't see it ending well, it is moving much quicker toward an ending that I think any one would have expected.

It's hard to look at today's divergences, Market Update-Something Strange Edition, and think that they had nothing to do with events in the EU/Greece, they were just too sharp, too fast and right before major news... The EU essentially gives Greece a 10-day ultimatum or face a Greek exit from the Eurozone, More from Reuters.

Watch for an even stronger pivot toward Russia over the weekend.

I suspect Futures Sunday night will be a lot more telling than usual at the speed events are moving in the EU, I'll have a thorough look at them and of course post anything that is of note.

I wish everyone a great weekend!

Broad Market Update

*See the very bottom for the bottom line, but the entire post should be read.

I've been going through a lot of charts trying to put a composite picture together.

First what I see as an upside risk based on concepts largely, not so much objective evidence other than what might be considered passive evidence.

The upside risk I see as a head fake move is just the head fake concept in which the more noticeable a range, the more watched an asset, the more likely that there's a head fake move before a reversal, if you pay attention to a lot of the charts in any timeframe, you'll see head fake moves, whether stop runs or false breakout just preceding a reversal, as per the concept, I estimate we see these about 80% of the time JUST before a reversal (in this case down).

The SPY (market) has done EXACTLY as we forecasted for this move...

 The exact forecast was for a move ABOVE this descending triangle and/or a Crazy Ivan shakeout which technically occurred on the lows of this most recent bounce as they were the lowest intraday lows of the year, meaning they ran any stops at support for the triangle throufggh all of 2015, you'll see it moore clearly on the next chart.

Conceptually, this is the best case for a move above today, the concept of a head fake move which depends on a well formed resistance or support area, in this case resistance and the head fake move would be a false breakout.

The first yellow box to the left is the head fake/stop run below all support for the area/2015, this gives added short squeeze momentum and we just saw one of the biggest Most Shorted Index squeezes this week, so the concept worked not only as a head fake move, but the reason why, the MSI short squeeze the strongest since Sept 2013 which is what got us up to the top of the range.

I see this conceptually as the biggest upside risk, although I see it as ultra high probability of a head fake move or failed breakout, which would make it a great set-up for puts or shorts.

On the other side of things, you saw yesterday's weakness out of nowhere and quite strong, even with a strong Most Shorted Index short squeeze, the TICK barely moved all day.

Then additional weakness today, but much broader and much stronger, Market Update-Something Strange Edition

The market vs the last two bounce attempts through all of 2015 thus far, is just as weak if not weaker than when and where they failed.

 intraday SPY 1 min calling a pullback intraday and in line since, it has moved lower obviously since this capture.

 I meant this to be last, but the 2 hour SPY from the strongest point which was the October lows/base and the clear leading negative divegrence hitting consecutive new leading negative lows, this represents the resolution of this cycle's highest probabilities, very negative.

 I meant to show the shorter charts and work to the longest, but this will have to do for now- the 3 min SPY and strong weakness intraday as you saw in numerous assets today.

Represented on the TICK, unlike yesterday with a monster short squeeze in the most shorted names that barely moved the NYSE TICK Index out of a tight +/- 500 range, today's selling effected the market and showed up...

Early as we saw gains in the market the TICK was flat, as we saw the decline we hit extremes of more than -1500 which is big and we hit a lot of deep extremes.

 The 5 min chart like just about all of the averages has not confirmed any upside move, in fact it has been in distribution mode, as with the two previous bounces, the idea was they need price strength to sell in to, that appears to be what has continued to happen, although likely to a sharper degree this time which would suggest the market preparing to make a lower low.

 10 min chart with as little drawing on it as I can, look at the 3C trend through the range,

I've highlighted areas of divergence.

What I haven't seen that I'd expect to see is a sharp negative in HYG, it's not there and usually is before a reversal. I don't see any strong moves in the professional sentiment leading indicators, they remain in line with the SPX, I do however see relative strength in both VXX and VIX (spot), this would have made sense as a hedge yesterday before the NFP this morning, but today it does not make sense unless someone is expecting a move lower soon.

 VXX unusual relative strength vs (inverted) SPX today.

Spot VIX showing the same.

 As for VXX charts,

 VXX 2 min leading positive along the lines (strength) of the market's weakness today as the two move opposite each other.

 VXX 5 min positive

VXX 15 min positive, it looks like it is getting ready for a move higher and the market a move lower.

Yields are supportive (today) of higher prices as you see by the 30 year and the 5 year is the same.

However I don't know for how much longer, the drop in treasuries that made this possible today doesn't look like it will hold...

TLT 3C charts.

 TLT 2 min positive the opposite of the market average 2 min charts.

 TLT 5 min leading positive

And TLT 15 min large relative positive.

HY credit fell today at the intraday highs, leading prices of SPX (green) lower

 HY Credit intraday

Here's the HY credit trend through the range.

Still HYG isn't cooperating yet or giving its usual signal.

The upside risk would be (as per probabilities) short term/short lived and offer some opportunities, but it is passive in that the best probabilities for an upside head fake move are the concept itself, and a few leading indicators that haven't gone negative yet,  it's not in positive divergences that suggest that breakout to the upside. This is why I'd consider it passive.

On the other side we have some very fast deterioration in the same area it has already occurred twice, we have a reach for protection in the 3C charts of VIX and Treasuries.

It's a little early to guess what the closing 3C charts are going to be, thus Monday's price action's highest probability, but so far it looks like the market picks up about where it closed, followed by weakness later in the day. As of now, the example would be...

 IWM 1 min in line suggests price Monday morning picks up at today's close.

IWM 3 min suggests later in the morning or afternoon Monday, strong weakness builds in.

I have to include the head fake concept as I preach it all of the time, it would be disingenuous for me not to include that possibility as I think many of you probably had already figured out on your own being we use the concept so often.

My gut is weakness and not just a return to the lower band of the range...