High Yield Corp. Credit as a Lever & an Opportunity...

This is intraday and falls in to the intraday "Noise" category I mentioned in the last post. In other words, ANY price strength is an opportunity to set up a position somewhere in some asset that we haven't already hit or may want to hit again. The highest probability resolution charts as seen in the last post and the path of least resistance is down for the market, but nothing moves straight down (as I have mentioned many times in the past, there are just about as many green days as red days in a full-on bear market, just the red days are significantly stronger-this is the noise that we can use as an opportunity).

I'm not seeing a lot that would suggest any kind of tradable, respectable intraday bounce, but I am seeing this which I want you to view in context by looking at all of the charts. In my opinion, the first lever of market manipulation that Wall St. reaches for is High Yield Corp. Credit, you saw how the market tracked it nearly tick for tick since the bounce off the June 15th lows. It is the price movement in HYG that the market tracks as a sort of short term manipulation, not the HYG divergence, that's for our eye only.

 This is HYG at the reversal process highs that the Week Ahead forecast from last Friday suggested we'';d see after initial early week strength (Monday), we'd see the reversal process and a move to the downside which most of the averages are well in to stage 4 decline from the 15th's cycle.

However intraday HYG is seeing a 1 min (weakest timeframe, but also most sensitive) positive divergence. Keep the trend in mind as this divergence has to be put in to context, meaning it's not anything that threatens our near term forecast for additional downside and what I believe will be the next significant move that slices through the SPX's 150-day moving average.

 A much closer intraday (zoomed in) look at the same divergence in HYG is seen here from about 11 a.m. or so onwards. Remember this is not what the market tracks, this is for our eyes only, it's the underlying trade that suggests someone is trying to work out how to pull this lever to create some intraday upside which again is useful for position entries (short) in to intraday price strength, but is not a threat to anything near term in the forecast.

I'd watch the NYSE intraday TICK Index and see if it breaks above the down-sloping channel, which would be (typically) early warning of such an intraday move. Perhaps one last hurrah before the 2 p.m. or afternoon session/close?

 NYSE 1 min intraday TICK.

As a reminder of where HYG is, remember it's in a primary downtrend and Credit tends to lead equities, the saying, "Credit leads, stocks follow". HYG is close, as shown last night, to making a new primary trend lower low which is in a series of lower highs and lower lows on the daily chart already, so it's in trouble and leading the market lower beyond this intraday chart's small divergence.

The 15 min chart which puts the HYG lever used for manipulating price higher off the June 15th lows which were the second tag of the SPX's 150-day moving average, the same day the Fear and Greed Index was massively bearish which I said represented too many people on one side of the boat, Wall St. would flip it over and change sentiment with a bounce, but don't expect it to hold. 

The chart shows us downside price/trend 3C confirmation at the green arrows to the left, then a leading negative divergence/distribution at the red box as price moved laterally and then broke following the 3C divergence lower which ran in to the June 15th lows at the SPX's 150-day support for the second time. There's a small positive divergence, the lever to help ramp the market and you have seen how closely the SPX follows HYG over this period until the reversal process and distribution at the red arrow to the far right sending HYG lower and the market as it no longer supported the Arbitrage that altos follow.

At the yellow hash mark, 3C has hit a new leading negative low so this is the path of least resistance for HYG bigger picture beyond the very small 1 min positive above (intraday).

Even worse, the 60 min HYG chart. There's less detail here, but a much stronger underlying trend. You can see where 3C went leading negative as HYG was flat, leading to downside. So once again, beyond a possible intraday bounce or attempt, this is nothing to be concerned over, it's a gift if it works to allow us additional entries (selling any price strength).

Keep an eye on that TICK index. There's nothing to say this 1 min divergence won't be run over, especially if Greek headlines start hitting again and the closer we move to the close.

Quick Market Update

Amazingly considering the Greek situation, Wall St. knows where their meal ticket is on Friday's and they've maintained the pin in the face of some pretty bad Greek news. Thus far it has been EXTREMELY Dull, normal options expiration Friday-Max-Pain pin for the most part.

 This is the 1 min intraday SPY, nearly perfectly in line and very dull.

The TICK data shows essentially the same thing...

 NYSE intraday TICK today

Our custom TICK Histogram, again, VERY DULL so far, although I don't expect that will hold.

 Remember the 5 min negative divergences and futures falling apart earlier in the week telling us the reversal process was about to end and stage 4 decline would begin?  The post is here, Index Futures Update

This is ES 5 min and price has come down to meet up with 3C's leading negative divergence that we saw earlier in the week (see post linked above). This would normally mean we are at a crossroads where the market can consolidate, although an op-ex pin is essentially the same thing.

We have seen some intraday noise and attempts to bounce, but I'd pay the most attention to these charts...

 ES 30 min leading negative 3C divergence at the reversal area (yellow) still leading negative. We need to remove short term noise and concentrate on the bigger picture/trend developing to the downside.

The same type of chart in the averages looks like this...

 IWM 5 min leading negative at the same reversal process area from the bounce off the June 15th lows.

Otherwise, the only really interesting action today has been the EUR/USd. You may recall , and I believe it's in the Futures update linked above, the $USD intermediate charts positive and Euro futures negative suggesting the EUR/USD move lower and likely not a good sign for Greece.

As of this morning, the EUR/USD just hit a 3 week low...

We do have some members that are FX traders or who live in Europe so this matters to them, for me I'm not really interested in the trade, I'm interested in what the movement tells us and you saw the reaction of the pair earlier this morning when Tsipras rejected the Troika's latest, greatest offer, it went down as we have just hit 3 week lows going in to the Ultimatum Weekend or what traders are calling Greece's Lehman weekend again (I swear it's like Greece has 9 lives!)

In any case, between the larger/longer 3C charts (negative) and the EUR/USD making good on the divergences seen early in the week and last week, I don't take this as good news for the market. The question is, when does the volatility pick up and from op-ex experience we know that's usually around 2 pm on Friday. Next is where are the opportunities so despite the lack of movement in most assets right now, I'm going through watch lists again and I'll continue to update the situation as well as any additional trade ideas that look timely.

EU Bailout Offer Denied

I was wondering what all of the dust up was this morning in the EUR/USD, although I hadn't heard any news other than the Troika had offered Greece a third bailout program that would cover debt payments or kick the can, until December.

Apparently this drop in the EUR/USD this morning, which as noted yesterday is in line with the intermediate to longer 3C charts (positive $USD/negative EUR futures), was Tsipras saying "No" or Nien...

EUR/USD 1 min chart this morning with the Troika's EU offer denied, which means tomorrow's EuroGroup meeting is likely the last chance to get any kind of deal as Merkel has set the pre-market open Monday as the deadline and the high EU commission has set the deadline as Saturday. the IMF's deadline is June 30th at which time Greece will have missed their June $1.7 bn Euro payment and at that point, just like with Lehman, no one knows where the spider web cracks will lead, usually to some surprising places that few imagine.

So far this hasn't made much noise in the market as it looks like a fairly normal Friday/Options Expiration Max-pain pin day...

 While the tone of intraday charts like the 1 min IWM above has been negative with any price strength being sold/distributed, so far this morning there's not a lot of movement in line with an options expiration max pain pin.

The QQQ 3 min also showing any short term bounces/price strength sold in to as we saw all last week and all this week, but not much of a dust up this morning.

The same is true for the SPT (3 min intraday). If you look to the far right, today's action is pretty much in line with price.

However remember perspective and not to get lost in tunnel vision. If we look at the trend of the exact same chart and timeframe...

 The 3 min SPY shows 3C trending lower and every bounce attempt no matter how small or the larger one since last Monday the 15th, they are all sold in to as 3C hits new leading negative lows. That's the trend, the message of the market and its not good for the bulls.

As for the intraday breadth/TICK, to the right we have a slight downtrend channel forming with a downside extreme of > -1000 hit this morning, but still not the panic of a Lehman Weekend in Greece yet.

I suspect the op-ex max-oain join will give way earlier than the normal 2 pm today.

USO / Crude Update

Last night in the Daily Wrap I expressed my frustration with USO which has intermediate term signals calling for a pullback, but USO has tested my patience which is pretty rock solid. The one redeeming aspect of the trade is the USO equity short's gains were offsetting the USO July 17th puts' losses, this morning they are both in the green.

Despite some intraday (small) positive divergence developing in USO yesterday (that which caused my loss of patience with USO last night), it looks like we may finally be getting the solid break under the $20 area and back in to the long term base.

I'm not going to detail the entire outlook/trade ideas for USO, but the gist is that a pullback (which will put the USO short and puts at a greater gain), should start to se longer term accumulation at some point in to the pullback for a primary trend upside reversal, at which point all USO/oil shorts/puts will be closed and the next, long term trending trade, USO/Oil long (with the appropriate evidence of accumulation) will be entered, this is the larger trade, the trending trade that I'm most excited about, but to get to a reasonable set up, we need the pullback first and it appears that is under way right now, although it wouldn't be the first time recently that it has started such a pullback and failed.

As for the charts...

 This is the longer term base area at #1 after the stage 4 decline from last summers breakdown at #4.

The yellow arrows are the general price movement I have expected, a pullback in to the base range, it finishes some work there and gets ready for a primary trend reversal to the upside,  the larger trend trade and the one I'm most excited about.

 The problem has been a break back down in to the base's range, but after noting this triangle. it looks like we are getting a break below its apex and back in to the range which is defined at about the $20-$20.25 area.

Although as I said, this hasn't been the first time USO has looked to move back in to the range and then failed and sat around the top of the range as you can see above.

Remember the parabolic rise in oil earlier this week (Tuesday) , these moves I never trust and you see why as it failed just about as spectacularly as it shot up which is the norm for these price moves.

So far this Crude Futures (Brent) 10 min chart  is in line and confirming the downside.

 This 2 min intraday 3C chart of USO shows the parabolic rise on Tuesday before the API data and the drop Wednesday on the release of the EIA inventories. It is the short term (2 min) positive divergence developing yesterday that was irritating me last night after crude broke the parabolic pop.

Remember these 3C charts usually pick up where they leave off (in the cash market),  however in this case, it looks like overnight futures action may have caused some deterioration, it's a bit early to make a definitive call, but there's already some negative deterioration this morning in the 3C chart above and...

This is the overnight crude futures which was in line/confirming the downside.

I'll have to check on the 3C intraday charts as trade settles in after the morning games and dust up, but so far we are at least below the $20 level. I'd like to see us go to the $16.50 area, but either way, as long as we get back inside the base and stay there for several weeks/month.

I'll update you as soon as the charts start to catch up to the overnight developments.

A.M. Update

Good morning.

There's a lot of talk of a bubble in China and a near bear market as The Shanghai Composite was down -7.4% and just shy of -20%, the media's technical amount to call it a bear market. It is a bubble and it's likely not going to end any different than any other bubble, but what will be interesting is how Chinese authorities and regulators deal with it although even that is a distraction of interest.

As for the main event, the Greek deal that must be done before the market open on Monday or before midnight Saturday at the next Eurogroup meeting, depending on who you listen to (Merkel or the EU), word this morning is Greece has been offered a third bailout program worth $15.5 bn which covers Greek debt payments until December, so it looks like the old kick the can routine the EU use to pull with Greece at that previous bailouts.

It's a bit strange as the IMF said they would NOT participate in a 3rd bailout program and lawmakers in Berlin have not been enthused about the idea either. Although there are quite a few details on how it would be funded, it's short on details of what terms the plan contains and considering such an offer (I don't know whether Greece has it in hand or not), it's awfully quiet surrounding this supposed new deal. I'm almost waiting for the denial of any new deal.

It is also said the EU is making plans in case of a Greek Exit. Perhaps if true, this may be why we were seeing new changes in short term EUR/USD charts yesterday, but of course at this point this is all speculation.

As to futures, for the most part we are right around the area of yesterday's close which isn't uncommon for an options expiration Friday to open and pin near Thursday's close. The charts look fairly mellow and as I would expect for a slight gap up in most of the averages.

 ES/SPX futures intraday divergence looks reasonable for price action.

What matters is what the chart looks like at the end of the day.

As for crude, the other mover this morning, it appears as if it may finally break under the $20 threshold, which is way past due as I wrote my patience is wearing thin with that one.

Today should be a normal op-ex max pain pin until 2 pm, but we all know Greek rumors, denials and headlines are likely to shake the market. I can't imagine traders will go in to this weekend carrying much risk, but we'll let the charts tell us that.

Daily Wrap

First of all let me apologize for the late start this morning, my internet was down which happens from time to time and I pack up all the computers and monitors and go to my back up location, that was down as well. I had to call in a favor to get to a 3rd location in another city with a different provider, get set up. catch up and get started. It's just one of those things you are subject to when working on line. Heck, I've done a whole dat before with a lap-top in the parking lot of a Panera Bread running off power inverters!

So far our "Week Ahead" forecast with initial/early week strength, turning to a reversal prices and moving to decline has been a pretty clean affair, the only difficulty in all of this is remaining patient and waiting for the forecasted signals to materialize, patience seems to always be the hardest part.

Tuesday's obvious deterioration in Index futures was telling us we ere in to the reversal process from not only Monday's gap up, but the entire mini cycle off the SPX's June 15th lows at support as represented by the second tag of the SPX 150-day moving average on an extreme in emotional sentiment to the bearish side, really a perfect set up. The charts on Tuesday showing what was essentially forecasting price action to the downside since then, can be found here, Index Futures Update.

Tuesday night's Daily Wrap made special mention of the deterioration with all of the Index futures' 5 min charts (the ones that are serious enough to hold overnight), this is one (NASDAQ futures) as an example of what things looked like going in to the overnight session and Wednesday morning.

NQ 5 min 3C chart. This was far from the only timeframe in futures that was showing trouble and a reversal process underway, just the most near term significant one.

This is what the same chart looks like as of just after the close today.

The reversal process which is a bit hard to see on this chart was nearing its end as the 3C chart was suggesting and moving closer to stage 4 decline.

If you remove the noise the cycle is pretty easy to see, stage 1 base off the 150sma-SPX support, stage 2, we even have the peeling away from the trend line that serves as warning of a change coming at the little red arrow, stage 3 as reversals are a process, not an event and stage 4 underway. The 3C divergence through this should also be clear if you ignore my "staging" scribble. In retrospect I'm a little surprised we didn't get an igloo/chimney head fake, but we didn't have signals to call for one either. 

As a concept, "Knowing where you are in a cycle to know where you are gong", I think this is an important one that any trader, trading any asset in any timeframe can use.

In the meantime, the shorter term charts like ES 3 min are showing solid confirmation. This is slightly longer than the 1 min intraday charts that produce some noise as price stalls or tries to get together an intraday bounce, this clears out a lot of that chatter an revealed the 3C trend which is perfect downside confirmation in to stage 4 DECLINE.

If you have followed the forecasts since June 2nd, or even just since last Monday, we are right on track.

SPX daily chart with a 150-day sma. At "A" sentiment was at a bearish extreme according to the "Fear and Greed" Index, you may recall the captures I posted of it and the excerpts from Monday the 15th of June:

"The one thing I don't like is the increased market perception and fear, that tilts the ship too far one way and it's very lucrative for Wall Street to rock the boat in the other direction quickly, stopping out or triggering trades, it''s short term maneuvering that has little to do with the bigger picture, but it makes them money." Monday, June 15th 

The excerpt above was from the same day as the arrow at "A". The reason I wasn't fond of this market sentiment extreme is because it sets up a situation in which a bounce is the highest probability as explained why above and delays the move lower below the 150-day, but it was expected as far back as the April 2nd forecast when calling off areas on a downside move where we'd see some short term support.

The yellow arrows mark daily candles with bearish closes via long upper wicks as higher prices were rejected, The orange arrow denotes a bearish  "Star" reversal candle and the red arrow denotes confirmation of the reversal that is inside the yellow box. The next significant move should be through and below the pink 150 day sma, assuming Greece doesn't get a rescue and a relief rally, which again would not change the under;lying assumptions any more than the bounce off June 15th lows, it's just noise within the bigger picture, but it can be useful just as this move was useful (NFLX short, BIS long, UVXY long, etc.-all positions at better entries, lower risk).

I'm not sure whether it is appropriate to use this as an example of the F_E_D-based knee jerk reaction which is usually wrong and retraced, there are two reasons...

These are the major averages since the F_O_M_C on June 17th, Transports have already retraced all gains, the Dow is just above, followed by the SPX, then the R2K and NDX. The first reason I'm not sure whether it's an appropriate example is because there was barely any knee jerk reaction on the 17th when the policy statement was released and the second more compelling reason is that we forecast this move on Monday May 15th, well before the F_O_M_C meeting even started, much less the policy statement was released.

In any case, this week's commentary by the F_E_D's Powell anticipating 2 interest rate hikes this year, meaning September would have to be the first (the next meeting) and the news yesterday that the F_E_D is NOT prepared to wait for the market, furthering the perception of a September rate hike and possibly 2 this year.

Leading Indicators look right as they have.

 Pro sentiment has fallen off ever since the May head fake move above the SPX large ascending Triangle that was the essence of the April 2nd forecast, the head fake move would fail and we needed that to happen before any meaningful downside would hold. We've seen some meaningful downside and Pro sentiment is not buying in to any short term pops, just selling and it's not just our indicators that have told us this, but the recent BofA/ML net buy/sales by client type with several all time records in distribution taking place last week ("all time" relative to B0fA/ML's data base).

Sentiment today took an even worse plunge if that's imaginable.

 I've already pointed out the primary downtrend in High Yield Corp. Credit and why it's important to market direction as well as my forecast that it will make a new primary trend lower low which its well on its way to doing.

HY Credit which has less short term manipulation than HYG shows an extreme fall off/distribution in HY Credit, recently like it has fallen off a cliff, but just to show how important the April/MAy SPX /market head fake move was...

Here it is on the SPX at the yellow box, the same area HY credit began selling in earnest with an ever increasing downside ROC in price, a near vertical drop off.

Again, it's not the forecasts or the charts that are difficult in trading any of this, it's patience in waiting for the pivots and the highest probability opportunities which we are moving through right now, thus the increase in trade ideas in the "Core short/trend " category.

Again today there was no Dominant Price/Volume relationship which is essentially just telling us that there's no build up of overbought/oversold conditions that may effect the trend of near term price action.

After having reviewed the normal rounds of futures I usually check everyday, there's nothing surprising in Index futures, there is some near term weakness on the $USD chart and some near term strength on the EUR chart, but the longer term $USD chart that has been showing strength and longer term EUR charts that have been showing weakness are still intact so I'm not sure if there's going to be a short term bounce in EUR/USD...

60 min EUR/USD/ The longer term charts I have mentioned several times this week point to a move lower in the pair. I'm not going to jump to any conclusions about the shorter term charts that showed some different behavior as it may just be a bounce or reflecting the flat/consolidation behavior recently, but I'll be keeping an eye on them as they do have implications for other assets.

Today's intraday charts of USO/Oil show some intraday positive behavior, while the intermediate charts are still calling for downside, but I have to be honest, as much as I preach patience  I'm starting to lose it with this range in USO.

As of now the USO equity/ETF short's gains have offset the USO July 17th's put losses (around -20%) and I don't have any serious reason to make changes as far as the charts go. Intraday charts today are far from reason enough to change positioning on this larger trend position, but if the charts start to change or the balance between the USO short 's gains and the USO puts' losses starts to start turning negative, I'll have to take another look at the position. This range bound behavior is not at all what the charts have been reflecting. We saw something similar in gold and it took a while, quite a while longer than expected, but gold did move in the direction the stronger charts forecast.

Other than that, I'll update VIX/VXX again tomorrow as well as TLT/30 year treasuries. If anything should change tonight before I turn in, I'll send out a head's up.

Have a great night.

Closing Indications

There has been very slight improvement in the NYSE TICK intraday the last hour...

 Intraday TICK

 Our custom TICK indicator.

This is very slight improvement, nothing like yesterday's "Just for fun" IWM calls for an overnight trade.

 The 1 min intraday SPY which lost yesterday's divergence or it just ran its course as we did exit the IWM calls at a slight +7% gain, has a very small relative intraday 1 min positive divergence. This is nothing like the one seen at the end of the day yesterday that was worth a shot at IWM calls, this is much less significant.

To avoid tunnel vision and tell us where we really are...

 The 5 min SPY trend with the mini cycle starting from last Monday (the 15th) lows at stage , 2, 3 and now a clear stage 4 decline. That's where we are, we expected a downside reversal this week, we are in stage 4 decline.

 Again, along the lines of avoiding intraday tunnel vision, the QQQ 3 min has also put in the same strong distribution and has also moved in to stage 4 decline from the Tuesday /Wednesday reversal process.

And the IWM which has had a longer cycle running is clearly ending that cycle, look at the leading negative divgerence to the far right hitting new leading negative lows vs. where price is now compared to the cycle lows at the white hash mark to the far left.

This market is moving as we anticipated in the April 2nd forecast, the bounce off support which was expected and normal and the move which I believe will lead us right through support levels, especially the SPX 150-day moving average.

Only surprise news that no one can predict at this point can change the trajectory of price.

When the Missles Fly, It's Time to Buy

You may have heard that Wall Street market maxim, "When the missiles fly, it's time to buy", which is often misinterpreted as the spoils of war being good for the economy.

It's actually about the market's hatred of uncertainty and whether a war is a good or bad thing for the economy/market, it's the prelude to war in which the market is uncertain of what's going to happen and therefore cannot discount events, typically resulting in the taking off of risk. Once the war begins though, uncertainty over the situation has been removed, thus the saying above.

The Greek situation has been about as uncertain as you get, but today it seems to have been ramped up even more. First yesterday's EuroGroup Finance-Ministers' meeting ended early and today once again the Greek negotiating delegation left the meeting early.

This was followed by an ultimatum from German Chancellor Angela Merkel who has been at odds with the very influential German Finance Minister, Wolfgang Schaeuble who joined Parliament as Merkel was graduating University and was leading the CDU party and bringing Merkel on as a his Secretary general before being caught up in some political trouble at which time Merkel took over. In this way, Wolfgang isn't just a Finance Minister, but a much respected member of the old guard who could lecture Merkel about what he was doing in German politick as she tried her first cigarette in high school. Thus Merkal's CDSU party has a lot of respect for Schaueble, like him or not, he's no ordinary finance minister. The rift between him and Merkel over Greece has gown recently, but has been in place since the first bailout talks and now the rift between Merkel and her own CDU party seems to be exerting pressure on her as she probably was the best friend Greece had during all of this.

Today Merkel said that the Greeks would need to come to an arrangement/deal before the market opens Monday.

Since then, Eurogrpup president,  Dijsselbloem has upped the ante by canceling the head's of state summit scheduled fro today and tomorrow, citing insufficient progress made on the Greek deal and gave the Greeks/Eurogroup until Saturday to come up with a final resolution/deal.

Today hasn't been a good day for Greece and pressure continues to be watched up. The ECB has been bailing out Greek banks on a daily basis since last week when the Greek Central bank's weekly request for ELA (Emergency Lending Assistance) funds which is money the ECB alots to usually sound banks to avoid a crisis bank run/capital controls situation, went from weekly requests to day to day requests with a lot of pressure from ECB governing members to either severely curtail or completely halt all ELA assistance as they see it as making Greek banks look stronger than they are, but it's really a political ploy to increase pressure on the Greek government to give in to Troika/IMF demands. The ECB/Draghi has been reluctant to halt ELA assistance, although severely curtailing requested amounts as the ECB doesn't want (or Draghi doesn't want) the ECB to be tagged as a political entity, which is FAR outside their mandate, but at the same time there's a good case to be made for cutting funds and there are few rules and a lot of wiggle room to essentially do whatever they want. Most pressure is coming from the German Central bank as well as the Irish Finance Minister, both calling for an and to ELA assistance which would=game over for Greece.

If that weren't enough,  the ECB has come out and made the threat today of halting ELA assistance, effectively crushing the Greek financial sector/banks as the ECB has more money lent to the Greek financial system than they have deposits or collateral.

And now the word is Donald Tusk, the President of the European Council that sets direction to political matters, etc. told Greek PM that the "Game is over", to which Tsipras replied, "This isn't a game".

With the EU leaders summit cancelled last minute, deadlines set for Monday before the market open and now moved up to Saturday and the ECB threatening to cut off the only source of funds that fills ATM's and cash drawers as money continues to flow out of Greece at the rate of around a billion Euros a day,  it seems the EU is counting on the Greek political inexperience to give in under  crushing last minute pressure , however even if that happens, there's no guarantee, in fact it's highly unlikely that any accepted measure by Tsipras would pass Greek parliament and with the June 30th IMF payment deadline fast approaching, I suspect it's probably too late to call for snap elections or a referendum in Greece to get the political actors in place that would accept a deal. Then the same deal would have to be ratified through all of the relevant EU member countries' parliaments as well and Germany in particular, despite Merkel, seems to be quite unwilling to pass any measures as made clear earlier this week with a hint when saying they would not vote on the accepted deal that lasted a few hours before the IMF chimed in and refused it, until Greece passes it.

And with that, the market is facing major uncertainty and thus not in a risk on mood whatsoever which just so happens to align with out Week Ahead forecast of early week price strength reversing and moving to a stage 4 downtrend.

That's a quick gathering of where things stand.

As I said, the Market Looks Very Dangerous

If you took yesterday's IWM, Trade Idea: Just For Fun, aren't you glad you tok your gains earlier today at the warning, Closing the IWM Call with a decent +7% gain rather than the current -18% loss. After all it was a short term trade and the market was looking dangerous.

 IWM 2 min chart's positive divergence and then...

This morning's warning that thing were turning south quickly.

Since earlier today, the divergence has fallen apart. I think in this case rather than finishing what they started (which you could say they did in a sense as they much likely has better positioning than us and we came out of it with a profit) , things just went to survival mode.

So far the move lower that has triggered numerous alerts I've set, has near perfect intraday confirmation.

 The intraday NYSE TICK shows things just went south, 3C gave us enough notice to come out of yesterday's IWM calls with a gain.

The custom TICK indicator shows the same, internals went south.

However this was already the highest probability outcome as the reversal process finished up after Monday's initial price strength.

 The ES/SPX futures 30 min chart as well as the mini cycle since last Monday with the now, 4 stages.

ES 3 min chart confirming the reversal process, moving to stage 4 decline.

Again, reversals are more a process than an event and they are proportional most of the time to the preceding trend. It just takes practice and experience looking at enough charts, labelling the different stages and getting a feel for proportionality.