marketspath

Hi Everyone,

Just the timing charts tonight. I am a little baffled that we didn't see a 20+ spx drop today. I am not sure if the shorts were not interested in getting aggressive today because of the pending Slovakia vote and they didn't want to get caught up in a squeeze if they passed the vote. I am really not sure why we drop a lot harder today, but we didn't. Is that telling us something? Again, I am really not sure.

The bears had the short side lined up on a silver platter. They had the wave count complete if they wanted to take it lower. The timing systems were all pointing lower, we had a tick divergence yesterday, a ramp up on zero volume, but yet the bears didn't even really try today. What they did do was defend!! Today was very strange.

So what from here? Because we didn't see the bears try and push the tape lower, do we head higher? That is a chance, but the timing systems are again, throwing up some major red flags. We kind of have a bearish divergence on the daily timing system. Hard to tell as the spx pretty much closed even today, but it sure is starting to look like one. The stochastics on the daily timing system has rolled over and we have an inverted sell signal on the 60 minute timing system, coming off of a double bearish divergence. The last time we saw the 60 minute timing system in an inverted sell, it has marked a top shortly after and we have seen an all out collapse and some very sharp moves lower.

The tick divergence was blown out today, which is very strange again, as we really didn't get that much price action to the upside. But by blowing out the bearish divergence today, it made its way up to the extreme overbought levels, which has also marked all out collapses or very sharp drops. The vix didn't show a lot of fear today, but our fear gage is dropping like a rock-meaning there is some serious fear in this market. In the past, when we have seen fear in the markets and price not falling, it has also caused some serious drops in the market. It is telling us that traders are reading and willing to sell in a moments notice or with the first sign of danger.

IWM and SPX made it right into major resistance levels today and with all of the timing systems throwing out major warning signals-now for 2 days in a row, I am expecting the bears to jump in as soon and tomorrow to start driving prices lower. But this market shocked me today and if it shocks me again tomorrow, I may have to start getting a little defensive with our short positions. We are only down a small amount from our average tza entries yesterday and today and we still have another 1/4 fill left in our pockets (3/4 short position)

So if they throw me another curve ball and try and gap us higher in the morning, we can always use that to take the last 1/4 position. But I am not going to lie, if we gap up, I will start to think there is some type of master plan in place that I am missing. The system hasn't let us down yet and I trust it, but we really have to see price start lower real soon, or I will start getting a little defensive with the positions. G-

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