PCLN Update

PCLN is actually a pretty good proxy for the market overall as far as near term expectations AFTER yesterday.

Yesterday this is what we were looking for to set up a put position or to add to a core short/start a new one.

Like the market, PCLN looks to be in a lateral trend intraday that I believe is part of a "jiggle" reversal process, "jiggle" meaning the noise that accompanies a big day often, especially when it comes to changing trends, this is why I spent so much time illustrating a trend in MCP so you could see that the market NEVER makes it easy, but if you stick with high probability, unbiased data, you shouldn't (most people) be scared out of a good trade. For example in the MCP giant downtrend there was a 5-week counter trend bounce, there was a +40% counter trend bounce, but the main trend was down, however looking back we don't think about the emotional burden of moves like that which are actually quite normal in any trend, people have just forgot what the market is really like because of the Bernie put, but it seems even $5+ bn in POMO yesterday couldn't help the market.

Today...

 Remember the first day of the breakout and shortly after I said I wanted a short in this area, but I'd first wait for lateral trade which would show up as a Doji or a Star candlestick, the next day we got our first star, then another, then yesterday and today all do a nice job in creating that "Igloo" rounding of a reversal process. In fact I'd call this area the larger head fake, but the market is fractal in nature and head fakes and every technical concept applies to every timeframe because the two driving forces of the market are the sa,me through all timeframes, emotions and specifically FEAR and GREED. Believe it or not, fear is the stronger of the two; look at the 2002/2003 to 2007 bull market, 5 years were tore down and then some in 18 months with most of it in 8 months.

 Intraday 15 min this is what the same area looks like, this is what I wanted to see, but the doji/stars created a clear resistance area and that is a target for a run/head fake/ bull trap.

This is the set up I was looking for yesterday, above the range with neg. divergences and buying a put in to price strength/underlying weakness.

This is the 30 min 3C chart in the same area so  what I'd like to see is what we have, a leading negative divergence on a strong timeframe, this tells me that any head fake move has a very high probability of a failure or a type of head fake. Failed breakouts lead to fast reversals, much like channel busters.

 The 15 min chart shows the same thing with more detail, the range in price in red is really obvious, that's the target area for me to add or enter a put.

 Intraday like the market updates, the 1 min chart is in a small positive divegrence, essentially creating a reversal process on a smaller scale, but thus a reversal process the same as we see VERY few reversal events, the difference is one looks more like a "U" or "W" and an event looks like a "V".

So far we have some positive activity intraday on the 5 min chart, I'm looking for a move >$1145, we may not get it, but that's what I'm looking for .

I'd set alerts and once this process is a bit more mature (you'll notice they tend to be symmetrical with the preceding trend and the stock's character) I'd be looking for the move up, the market would likely move at the same time.

There is the chance a divergence gets run over as the 1 min positive in PCLN yesterday was, but I think this is a reasonable projection of what to expect.