Not much to do

If you have your shorts in place, there's not a lot to do right now other then manage the trades and take advantage of any countertrend pops we may get to make some extra cash along the way. The price action the last 2 days is significant and plays right into our core positions. It appears we will see a Head and Shoulders top unfold, s of now, the first or minimum downside target for the SPY should be $87 which makes sense on the charts. However, such downdraft is likely to bring more downside momentum and I have maintained for months now that I expect to see new lows in the averages. Remember, Fear is stronger then Greed so the market will fall a lot faster then it rallied.

The only unfinished business is UNG. The trade is precarious, but it did hold the line in the sand I drew last night. Here are  a few charts and we do have a few positive divergences suggesting upside tomorrow and that may build.

Above is the Trend Channel I use for stops, UNG held the line today which was very encouraging

This is a 2-day 3C chart and very significant in the leading upside divergence or extreme accumulation

This is a 1-dy 3C chart written with  different code, but the same leading divergence

The 15 min 3C chart suggests the downside is over as accumulation has begun again 

The 10 min chart confirms this as does the 5 min chart below.

Here is my proprietary crossover system, all 3 parts of the system still are calling this a long trade. As I mentioned, note the first pullback to the 10-day moving average in yellow and the second to the 22 day in blue, I see this time and time again. Also MACD is positive and the VWAP is in good position as the average price paid over the last 30 days weighted by volume is just above $7.50 (VWAP in red, the top window is a 10 day ma in yellow, 22 day in blue, the middle window is a custom indicator in yellow and it's moving average in blue. With MACD in white is a 22 period RSI which is above 50. All 3 components are needed to place a long position and hold it. Despite the volatility, I continue to believe in this trade. I think it is at an excellent Risk:reward level to initiate a long trade in UNG or to add to it.

Look for updates tomorrow as the market events unfold. I'll be adding selective shorts, but for the most part we already have everything we need to take advantage of the market's stance. Trades will be issued as opportunities arise, most will be quick counter trend trades, there may be some tomorrow night listed. Keep an eye on the site.

Update 2

We have 1 very minor 1 minute positive divergence, it may not amount to anything, it may be day traders covering shorts, but in any case, all the other timeframes are solidly bearish at this point. Yesterday's bearish engulfing candle is known in western terminology as a "one day key reversal" and it appears it was exactly that.

Remember that UNG's stop around $8.08 (actually below, but that is just a recommendation) is only for the end of day, not intraday. All stops found here are the same (both recommendations, not written in stone and for the end of day).

ANO

Keep an eye on ANO from last night's list, it's looking like it wants to breakout.

Update

At 10:3 I posted a chart at Trade-Guild that 3C 5min was forecasting one more move to the upside, we got that move. However, the positive divergence on the 5 min chart persists, there may be more upside coming. The longer term charts are still solidly bearish so this may be of some use in entering short positions at better pricing with less risk as they are closer to natural stop out levels.

The Gap Was Helpful

As a way of entering shorts at a better price. See Trade Guild, it looks like we'll get another upside attempt soon.

UNG has a 1 min positive divergence right now, that's about it. It could develop into more, but if it closes below the Trend Channel at $8.08, I would close the position just before the end of day. However, as I mentioned, the second pullback in a new trend is usually at the 22 day moving average which is at $7.94 (it may rise a little later today), normally the Trend Channel is inline with this concept, in this case it's a bit higher so it is not unusual to see a move to the 22 ma, you'll have to decide how you want to handle it. If I see anything that is relevant to UNG today, I will post it.