GOOG

Today we closed the GOOG weekly $800 Calls which were going to expire this Friday so momentum is important right now to get the best gains out of GOOG, even if GOOG make a higher high tomorrow, the time decay and volatility start eating in to the profits. I don't think the exit today was perfect, but it was pretty darn close.

I mentioned today that GOOG looks like it has more fuel in the tank and I'd be willing to consider another short term call position on a pullback as long as the 3C charts hold up, so lets take a look at what's already in place, what is likely to happen, what we need to see happen and where a decent stop is (although this isn't the choice method for managing risk in an options position, it does help with the Equity short and helps us understand where the trend changes and GOOG's longer term characteristics reassert themselves.

 GOOG 2 min shows the accumulation at the lows on the 28th, in line on the gap up and where GOOG started to see distribution today on an intraday basis.

 A closer look at the 2 min chart for today shows where distribution started to take its toll on momentum, the blue arrows are the two areas we closed out the first and second half of the GOOG calls for a decent short term gain.

Like most of the market, GOOG shows a late day positive divergence that sent prices higher, note that it started around 3 p.m. which is where we see a lot of other activity in the Daily Wrap post, whether it be in TLT, VXX, HYG, HY Credit, currencies, etc. There were quite a few levers used and the target for the close was right at VWAP.

 The 3 min chart shows a deeper leading negative divergence so I'd think GOOG will pull back, this may give us an opportunity to start a new long position in to the pullback as it gives us a better entry, less risk and a timely entry which is important with weekly options.

 Using a 5 min chart a ROC (Rate of Change) on price today, the two exit areas are nearly perfect as the ROC starts to fail as 3C shows profit taking/distribution slowing momentum and option gains.

 The 5 min chart has a smaller negative divergence, this means this far there;'s no heavy flow of selling.

 The 1 min chart shows the top area and the leading positive divergence at the low as well as currently, this is the heavier flow of funds as it is a longer chart, this suggests GOOG has more upside, but probabilities favor a pullback before that further upside, it may be intraday (a short pullback) or it may take a bit longer.

 The 30 min chart is in line, then negative at the top and leading positive at the lows, this too suggests the longer term probabilities favor more gains (I'm talking longer term in the context of weekly options, so not that long).

 The 4 hour chart is negative so ultimately our longer term shorts should do well, we should be able to short in to some more price strength as well.

Right now the Trend Channel has a stop on a closing basis at $786.75, this means a break below that area means something has changed in GOOG's character and changes in character precede changes in trends.