Here are the stocks that would go up on a strong dollar. Again, watch what 3C does on Friday.
Did you notice that their 3C behavior is exactly the opposite of the first batch of stocks on Friday?
Now the Market ETFs....
On some of the stocks above I annotated all of the 3C moves so you can see it's working as it should on a 1-5 min chart. I also varied the timeframe so you can see some of the more important timeframes, but the majority of the stocks that exhibited this behavior, did so on Friday, many later in the day, just like the market ETFS above. What I really wanted you to notice was 3C's behavior on Friday.
I could list hundreds, I tried to stick with the bigger leader stocks that trade a lot of volume, but this behavior is everywhere.
I don't know if this is a market thing or something is brewing with the dollar. Logically I can not see a catalyst for a stronger dollar at this time, but there's a lot of consistency above. Patterns that are consistent in Technical analysis usually mean something, what that is, I don't know, but the pattern emerging at new highs on Friday in 3C was not bullish.
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Options expire on Friday. The largest SPY open call interest is at $116 with 103,774 contracts. The highest put option is at $100 with 395,282 open contracts. The overall volume of put contracts from $116 down to $100 is overwehlming, none of which are currently in the money. I believe we are near put to call ratio that was equal to the time before the Flash Crash last May.
great charts Brandt...i am still expecting residual strength (or psuedo-strength) early in the week...S&P to hit 1175. But the rubber band that is markets at the moment is already stretched to breaking. Shorts need to keep resolve...hard i know (since thats my position)...your 3C's lend strength to my resolve...thanks
Thanks AC, I'm glad someone made through all those charts. It took awhile :)
I'm tell you now, the only thing that will knock the equity markets down big at this points is either:
1. No QE2 (or not as much as was 'expected'').
2. The illegal foreclosure fiasco really kicks into high gear in the U.S.
Both of the above could be big.
No.2 could really kill the economy dead as it has huge implications.
No.1 will just kill the equity markets.
The illegal foreclosure fiasco is the one to keep a watch on in my opinion as that could snowball and get nasty very fast.
Oh, and it looks like the $dollar is getting hammered against the EUR again. Above 1.40 EUROs now.
How can 3C get this all so wrong? Seriously it's made absolutely terrible calls on equities, precious metals and FX.
Did your high roller close or reduce his shorts Friday Brandt? Can't believe he still has them open, he wanted to close when the DOW was around 1850, correct? But you advised him against it, and now the DOW is above 11k and the dollar gets weaker daily.
100% agree. These are the type of news events that smart money has seen coming or new about long before the story broke. This is why I say they plan out so far ahead.
Think about this, if this news was just coming out and it was Sept 1st, do you think the market would have made this type of gain?
The Fed may be forced to use QE money to bail the banks out as this has the potential to be worse then even the housing bubble. Can you imagine having to go to court to save the foreclosure home you bought because the foreclosure is challenged by the original owner. That's 2 lawsuits suing multiple companies.
An excellent area to look for shorts would be firms that write title insurance.
Now does that Friday rally of Dow 11,000 on the lightest volume all year, 189 trading days, make sense as a probable head fake?
Thanks for the comment.
... meant to say DOW 10850.
oh, also according to GS, at least 500b maybe $1T has already been priced into the market. Interesting that they would even make that public.
Might be worth running 3C over the firms that write title deed insurance to see if there has been heavy distribution recently?
Know of any off hand, going to look at Ally Financial that has it's first lawsuit from Ohio's AG, also JPM, BAC and a few others. Also looking for long trades in Grain producing/short meat producing like Tyson.
No sorry Brandy, i don't, not familiar with that sector.
Anyway, futures are going ballistic, gold up $10, DOW up nearly 40 points. Can't imagine Asia markets doing badly, so looks to be a good solid up open for U.S. markets.
When do you think that 5minute 3C charts of the SPY heading down will take affect Brandt, you first posted it after close of play last wednesday i believe? Monday, Tuesday?
... sorry, meant to say Brandt... my big old fat fingers.
NP-use to have a dog named Brandy, chocolate Lab.
There was about a day of accumulation, it's difficult because I only have 4 days of historical info on intraday 5 min charts. Using a STOCK as a model, and the reason I have 3 different versions of 3C is because everything is acc/dist differently, ETFs different then averages, stocks different then both, high priced stocks different then low volume or high volume I should say rather, but based on the stock 1 good day of acc. then there were 5 days up, the last was a breakout to a new high like the Dow on Friday. The next day was a down day then there were two lateral days and it turned.
ETFs are different and we have some pretty big news. The Euro opened strong on a gap, but it's been sliding down since. We'll have to see there. Any way, the stock shows me about 2.5- 3 days of distribution, accumulation is always faster then distribution. The third day it tumbled. There's a lot of assumptions there, but the divergences very very clear, nearly straight down. Considering 11,000 is a pretty significant breakout psychologically, I'm very surprised how low the volume was. I thought at first when I annotated the chart it was the lowest in 4 days, then I started counting and it was either 189 or 190 day-back in 2009 to find lower volume on the Dow. 3C or not, that's not a good sign. Then how quickly the gains were given up -just goes to show Fear is stronger then greed. So it took nearly 2 hours to out that breakout rally together, and it fell apart pretty hard in the last 4-5 minutes, although it started earlier-maybe 15 mins or so.
Distribution almost always occurs on light Volume-accumulation too. If you look at a rounding bottom or top, the volume rounds as well and the volume is very light at the height of the rounding. That's something Technicians fail to realize. They look for volume spikes, volume spikes are attention getters because so many people incorporate them into their scans. They assume that's institutional money buying, it's not, it's an advertisement that they are ready to go from stage 1 accumulation to stage 2 markup. Of course you can make money following the volume spike, it's just not where they accumulated.
Any way, Quality Stocks and I are trying to keep track of accumulation ration to distribution. I'm also working on some indicators to judge the volume accumulated vs. the daily volume-very complicated. As you know 3C shows the distribution but doesn't make predictions on when which is likely impossible. It could be smart money wants to coordinate the turn around with an actual event-an economic release or something.
In any case, the extent of the distributon was quite severe, this may have to do with the very low volume, there may have been a LOT of smaller transactions to send 3C that low that fast.
With a divergence that sharp, I'd think we'd see something relatively soon, day or two. Any way, I'm working on all of this stuff.
There's a divergence in RSI 5 and standard MACD. Both called the last top. IF RSI 5 heads down tomorrow I'd think based on the last reversal there will be downside tomorrow/Tuesday.
Remember though this is a 5 min and a 5 min is not a trend changer, more like a short term like a 5-ay moving average. However we do have negative divergences in the other longer timeframes too, the way this would work is the degree of the negative divergence in the 5 min will affect the 10-min, if that gets as ugly, then the 15 min, etc. These are the charts that move trends like this. They're already in a place I'd consider to be a no buy zone.
The news as well 40 state's AG's launching a joint investigation raises the question whether there's any Federal jurisdiction, meaning Obama might not be able to sweep this under the rug as fast as he's like.
Honestly, Even the 2008 2009 Fed manipulation wasn't this bad and it was bad. However 3C still called the divergence-different set of circumstances. There is a persistient short position, we know that from releases and of course 3C. Judging by Friday, there's not many retail traders left in the market, so the question is who has this big short on, I think as 3C suggests, smart money. There's a lot I don't understand ,"How will the dollar go higher", "How will QE 2 proceed?" "How can the market collapse with QE2?" Believe me, I have the same common sense questions as everyone. In the past though when I argued with the chart I lost and usually the event that was behind everything was something I never dreamed of.
I have to get to scanning and working. Look forward to more productive conversations.
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