The Wrap

One of the bullish looking trades that has been developing, despite the stronger dollar has been USO, the only reason I can think of would be inventories released tomorrow. If inventories cause oil/USO to rally, you can be sure the number was leaked because it's sure not coming from a weak dollar as the Euro dropped 2% today, which is just off a one day decline record for the year.

On the flip side of the coin, there has been some decoupling in commodities vs the dollar, gold gained today on a stronger dollar as did agricultural commodities.

Again today it was a heavy news day, in fact had it not been for th Korean conflict, you'd notice the flow of news and fundamental problems and mysteries is accelerating, whether it be out of China on fear of monetary policy tightening, out of Europe on fractures in the E.U. And the rising risk of a Spanish bailout and “Contagion” or the other-wordly, all out war the SEC, FBI and Justice Department have taken up against every type of institutional fund, adviser or trading firm. Why they are doing this and why now is a complete mystery. I was asked if I think it'll effect 3C, it may very well effect the market as funds see increased liquidations and legal costs-which will be bearish for the market and depending on how deep they dig, they may hit a few unintended causaluties, or better put, “Friendly fire” against some institutitons that they really don't want to rock right now. As for 3C, it tracks accumulation/distribution, funds will still take massive positions whether they are less informed or not, 3C should continue to see those positions. Maybe in cheaper stocks that are more apt to be manipulated, but I doubt it'll have any negative effect.

The 3C charts today were very suspicious, I resorted to looking at MoneyStream just because the 3C charts didn't drop at all like I'd expect. MoneyStream did drop, and badly, but it's more of a heavy blunt indicator and doesn't give the same quality of signals so I hop to see some return to normality tomorrow.

The daily 3C SPY chart looked like this...

On the daily chart, we did in fact see a big move down and that's where it counts the most. Also that zone of support is pretty close. It looks like we'll be adding to short positions this week. EDZ is near the top of my list.

To be honest, the news is getting to the point where it's pretty hard to keep up with and none of it has been good. I can't imagine this market can go too much further either up or lateral without an extreme shift in sentiment. Judging by today's losses, that sentiment shift may already be under way. By the way, they were on increasing volume as well-a sign of panic.

I love the markets, but I actually can't wait for Thanksgiving. I'd like a day to step back and see something in the puzzle that seems to be eluding me and sometimes a day away from the markets allows you that perspective.

The Euro right now is just starting to turn down from a light 7 hour bounce. If recent history is our judge, then we'll wake up to another story out of left field and a Euro that is tanking again.

Be sure to take a look at the recent ideas I've posted, especially any of the several wedge pattern trades, their all starting to move out of that zone of volatility from their breakouts that requires wide stops and the fact that is happening means the trades are working as they are supposed to.

I think I'll be up extra early tomorrow morning, and probably for no good reason. It may be the one day when nothing interesting happens. That would be nice, it would give me some more time to put out some more trades for you.