Friday, September 17, 2010
Lesson 2-Market Market/ Specialist Corruption
Here's why T.A, is increasingly useless and likely to cost you money on every pattern you react to
For semi-real time commentary on this particular pattern click HERE for the comments regarding it
19 comments:
How's 3C think the close is going to look Brandt? What's the highest probability, up, down, flat, strong, weak?
I'm not sure where they need to pin the contracts today, but it seems like they are targeting the 112.50 area.
not an easy question to answer, all the majors went into leading 1 min negative divergences, the move down was so fast 5 minute charts haven't caught up, 1 min is also the most easily manipulated and quickest to change. I don't know about the close today, but looking at AAPL's change.
For today, if the leading 1 min divergence gets worse then I'd say we'll get the close I showed earlier that I said would be good for us on a daily. This last half hour is when a lot of volatility players have been entering the market so it's a newer trend and one I don't understand yet. I'll update you on any significant change that seems to indicate an answer
a break of $112 and I think we have a reversal.
Brandt,
And if we don't? What do you think the most probable outcome is next? Back over $130? Apparently we've had heavy volume today, does this give us clue?
"Stocks seeing unusually high volume during today's session:
US STOCKS
18:03 17-09-2010
The following is a list of stocks seeing unusually high trading volume on the morning of Friday, September 17 (12:43am ET). For each stock, we’ll list the ratio of today’s volume relative to the 3-month average (i.e. the Relative Volume indicator). "
http://ransquawk.com/headlines
Yes, the heavy volume on a down day would indicate panic selling, which is exactly what we want-it's the unfolding of the bulltrap. I notices that early in the day and that got me looking at AAPL
If you are fairly good at seeing divergences, then use the intraday tick symbol, for me it's "$TICK" on telechart and overlay the SPY on it, it seems to be the fastest measure of a reversal as it is going by each tick.
obvious resistance at the trend line for the wedge we broke, around $112.70-hve to see what the market on close orders bring.
3C 15 minute leading divergence hitting new lows, 1 minute is in line with price, 5 minute can't catch up to the fast moving market.
Looks like we are in the target range of where they need to pin the contracts for the day. Any guess what happens after the close today?
A good sign for a US dollar rally?
News Headline Summary
USD net shorts rise to highest in a month - CFTC
While AAPL is following price/3c-3C's relative placement is at new lows, a leading downside divergence in the 1 minute.
We finished just about flat on the DOW. And down about 5 points on the SPY.
Does this tell us anything?
What do you think will happen next week Brandt. Are the cracks starting to show? High probability of a reversal next week given the length of this 'bounce' and the price action at 'top'?
Jack, AH started to sell off, there was an ascending wedge at the end on the last advance, the last print broke below it on a huge down candle and huge volume. With the AAPL trade seeming to reverse now, they may be done with it. The market today was largely lateral which makes it difficult for any indicators other then oscillators to be effective. Obviously bull contracts were pinned and the bullish sentiment again is a listing boat-just like we saw in reverse at the end of August. We are seeing the same 3C long term signals we saw on late August, so my guess is that we have probably cleared a hurdle in some sense.
The bullish sentiment with the low consumer confidence will take it's toll, but I think very clearly from what I showed you last night with AAPL, it was used to do the rest of the dirty work as there was a gap in demand between when most shorts covered and not quite reaching the level that will comfort bulls and get them in the market. The candle and volume are not what I hoped for but don't forget because of the Jewish holiday, volume was bound to be rather low, it was relatively high as we backed off the $113 level earlier today. The vix can sit around these levels of complacency for a week or so, but almost always end up with the decline they suggest. As I said, seeing what they are doing and knowing what they are really up to is something we just can't discern, in my experience it's day, weeks or moths before you find out the real reason. I don't think today did anything for the bulls, but may have done something for Wall Street in the way of options, THIS IS WHY I REFUSE TO TRADE THEM you haveno advantage and other then after hours trading, they are probably one of the most manipulated investment vehicles available.
That VIX positive divergence still stands , last time it was about 2 weeks after what would have been Tuesday's expiration before we saw the decline and it was huge- ending with the flash crash. This is not a common occurrence and it's bigger then the last.
MR. PINK considering the obvious accumulation in the dollar (the big slip seemed to have to do with the BOJ intervention) and this news article, what we know of their behavior makes sense. The last 2 days of daily dollar closes is common at a reversal-first the down day on volume-mini capitulation, then a close higher-today. Technically speaking there has been no damage to the start we have seen in the dollar reversal-no lower low, etc.
Considering gold's negative divergence, AAPL's, the market's the dollar's positive, the VIX positive, everything seems to point in the same direction-even the 5 or so failures at that neckline on otherwise bullish sentiment shows that someone didn't want this to occur, just to give the hope that it would occur. It would make sense to look at the expiring options today and see what have may have been the target to pin.
I read when I get home, need to leave the office. Thanks.
AAPL today was a big insight, I think the cracks are starting to show. I also think $112 was pinned on the puts and $113 (the bullish breakout) pinned on the calls, I still haven't seen the options chain yet.
But with all the breadth indicators, the rose of AAPL for no real reason other then its weight, I think we are seeing some light here. Investors are not so bullish that they can pull up the A/d line, still more stocks declining then advancing into higher prices this week is NOT bullish.
It is helpful to put all the known information on the table, and to determine which conclusions fit all the data and which do not. In this manner, you can eliminate most possibilities, and discover through the process of deduction which scenarios remain. Of course, you should have a detailed plan of action even if the least-likely scenarios actually develop. While you can never know what the future will bring, you can always be fully prepared as to how you will deal with any possible contingency.
Q.S-very well said. That sounds like experience, not books talking.
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