Bird's Eye View

See late day comments under the post, "Not Unexpected"

Above is what gets the bulls excited, I've covered this in numerous posts, the idea of a H&S bottom. In any case, the last part of the scenario for this bounce, published before it began so this is not a case of changing perspectives as the trade goes on. The only time you are truly the most objective is before you enter the trade. After that, swings create emotional doubts.

Last night I talked about the chance of the price being taken into Bull optimism territory, like the EOD today.

Here's a bullish bull flag. For the bulls, the implication of a breakout is much higher prices. However, as I warned in the comments, look for a false breakout here. Even though Institutional money may want rices back above the $113.25 level I pegged the other day. Here we see the upside breakout, then the return back into the flag, this is basically creating chaos with longs in and then out, shorts in and out, etc. The real catalyst to a downside move is a break below that bull flag. Just as earlier in the day, the catalyst to move prices up like we saw was a break below support, that caused shorts to cover, creating demand which moves prices higher. The earlier break of support at 2:33 and then the move back above it at 2:53 was the catalyst for moving the market higher, as I explained, this caused shorts to become buyers. Note the negative divergence (relative) between the two points where price is the same.

Here's the 5 minute 3C chart, while it appears to follow price we can see at the same relative price levels before, there is significant negative divergences at each point in which price reaches that level. This could be taken as institutional selling, but I think that was complete much earlier, I'd guess it is institutional short selling.

The 15 minute shows the initial accumulation BEFORE the move even started, telling us this was not a market wide oversold bounce, but an institutionally instigated bounce. As prices move higher, 3C moves lower indicating they are bearish on the move, selling/or short selling.

The 30 minute chart is a longer perspective, still like the charts above we see the buying at the white arrow that instigated the bounce-this is institutional. At relatively the same price levels (red arrows, you can see how much distribution has occurred.

Finally the 1 hour, again shows where the institutional buying started before the bounce, this is what we picked up on August 25 and I wrote extensively about August 30, again BEFORE the bounce even started. You can see the negative divergence into the bounce has been persistent, regardless of the gains in price. This is called selling into demand. OR short selling. Creating demand is the only way they can sell or enter short in big positions at favorable prices. They don't want to sell or go short into falling prices. This is one of Technical Analysis' biggest misunderstandings, that institutional money creates rallies by buying them, they have bought long before it started at favorable prices.


I hope this gives you a better perspective of Wall Street and what we see on a daily basis, especially as it relates to conventional technical analysis and how often those patterns are manipulated.