Daily Market Brief

$SPY update

$ESAs the $IWM disconnected from the $SPY today I posted a tweet with the following daily $ES chart with $ES at 1808.15 suggesting a short trade with a stop above. Why?

Simply the $ES had moved under the daily trend line and was in the process of retesting it with $IWM off over 0.5% indicating a large divergence.

Interestingly enough many seemed little bothered and kept on buying $SPY for a bit despite the glaring divergence, but not for long. Eventually the pattern was confirmed and we had a nice breakdown giving us downside acceleration.

$ES 15 minHere’s how the chart played out on the 15 min chart with my short price entry indicated by the red horizontal line. Those that followed into the trade got a very nice return either in options or futures. Per my post over the weekend we are now likely entering the corrective phase. A close below the 5 EMA and 8 MA is a solid first step which paves the move toward a 21 MA test. Note also $VIX moved higher nicely per the weekend chart.

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