Friday, August 20, 2010

There's a lot happening

3C is going in a lot of different direction, I believe this is due to fast transaction occurring, perhaps algo-traders are now heavily active. Algorithmic traders, specifically "Sharks", use a system to look for "Iceberg" orders in what they call a "dark pool" which is where orders are anonymous and usually hidden from view, in a manner similar to how 3C is used to look for accumulation patterns. However, instead what they do is send small orders or pings, and when those orders are filled, they know that there is an "Iceberg" order or suspect there is a "Iceberg" order, which is a much larger order being filled a little at  time. This is one of many algo trading strategies, but bases on what I'm seeing, it appears as if something is happening out of the ordinary.

The best tell on the market right now is UUP in a 5-min negative divergence
The SPY is now moving up off lows where volume was quite low, this is a typical accumulation area. $107.40 is an area on the SPY we want to keep an eye on. As I told you in the video and for over a week now, the trading strategies have been "a day at a time" which is strange behavior for me, but the market's are ever changing and the systems out there are ever changing. This is why it is often good to step back and take a look at the bigger picture. UUP on a 1-min chart does not show the same level of distribution, so stepping back a little gives us a clearer picture.

Remember, we are in a bad, bear market. Long trades are counter trend and I can think of few at this point that I would enter, at this point!. Strength is often a great way to enter your shorts, so I'd take a look at the trades I've provided, hopefully you set some alerts.

I will continue to update as things develop.

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