The Week Ahead

I'm not going to cover stuff we've already beaten to death like falling yields and what that has meant in the past. I will say that the "Trade Ideas" posts went down by about 90% over the last couple of months and I didn't really like that, but the signals just weren't there. Now in retrospect I can see that we have had a range in effect of +/- 3% since the end of February, that's a horrible area to try to trade.

Making money in there market isn't just about successful trades, it's knowing when to preserve capital and stand aside, I didn't forecast the range (of that size), but 3C did give us warning in poor signals that weren't up  to snuff for a lot of trades.

Some of thee things we have expected included a run above the range (head fake) before a downside reversal, there was no accumulation for that move, instead it was built around a bear flag and a sling shot until short covering took us the rest of the way.

As far as that short covering, these are the 100 most shorted R3K stocks in one custom index the SPY...

Most shorted in red, SPY in green. Note how the short squeeze fell off today.

One other Index I have been watching is the Transports...

 1 min

5 min

30 min

60 min.

It looks like the transports rally is over and that is a big deal when we are talking about market expectations.

HYG was used today to ramp the market

 flat during the pin and up at the EOD

However not all credit was so impressed, High Yield actually went the other way.

Nor were professional traders,

 Sentiment intraday which has been a trend as of late.

 VIX was also   monkey hammered in to the close, but closed up on the week

TLT continues it's strange correlation with stocks...

And Yields are calling equities lower, the white arrow was a ramp today, just for perspective... and that looked like...

This over the past 2 days, still it's a drop in the bucket looking at the chart above.

As for the market, there was a little end of day strength, which is why I said,

"Essentially, if you take the NFLX Trade Idea Follow Up from earlier today and apply the same expectations and the same logic, you have the market forecast in to next week, "

 SPY 1 min, this is the kind of noise that is actually useful for tactical entries, but it's not giving us the really important information as the short squeeze abates...

 Migration didn't make it far, 2 min SPY

This is the trend since the bear flag that sling shot the market in to a short squeeze and head fake move, the fact we have a negative divergence on a 15 min chart tells us the probabilities are very high we have a head fake move.

And as far as the longer trend, what the head fake move jump starts, here it is since the start of the February cycle.

To the right, this is one of the best examples of a divergence no matter the indicator.

Speaking of which, I found this while looking around at news, smart money flow from another indicator..

 Someone else's smart money flow indicator...

 And ours with the first major neg. divergence at January highs in both indicators and distribution right in to the February cycle's rally and just worse from there.

As for the Dow...

The same divergences in the same places.

As I said about NFLX, I think there's a day or so left in the reversal process, THIS WAS A THEME THAT WAS MARKET WIDE ACROSS NUMEROUS WATCHLISTS AND DOZENS UPON DOZENS OF STOCKS WE ARE TARGETING.

So, I say sit tight, if NFLX, BIDU and many more want to come to us and give us the kind of signals we haven't had for months so we have the best timed entries possible, I'll take that.

Now, it's my birthday and II'm going to celebrate!