If you read Trade Guild last night....

Then you'd know that as I explained in the long-winded post, the most likely outcome today would be an intraday penetration above the gap or a close above it, which is set up, as all false moves have been, to take people's money and shares and provide the fuel for the next reversal.

I could be wrong, but I don't think the series of accurate calls that we've had which include the one last week about this bounce with the target while the market was still in decline. The bounce was right on, the target was right on and last night's "most likely outcome" was right on. If you look tonight at today's move, you will see that this does not look like traders excited in anticipation of earnings, but rather the oversold bounce as I called it last week. The stats back that up.

I know that this is a nerve racking experience and your instincts are telling you to run the other way, that's what Wall Street counts on to make it all work for them. At the same time it would be highly egotistical and irresponsible of me to say that "I know what the market is doing, follow me". We need to have contingency plans even if we think the chance of needing them is 1 %. So next week we'll take a look at AA and the others announcing and we'll see if there's a chance of this pendulum swinging higher and what we need to do to counter balance that scenario. I'm also going to try to show you how crooked Wall Street is and give you some predictions on the outlook and response to companies' earnings. Just email me your favorite stock reporting a day or so before and I'll look for the tell tale signs of a leak and show you so you understand how rigged this game is and how we can use it to our advantage. We might even make a few quick bucks on the leaks.

Otherwise I think the analysis from last night is solid, the bounce (despite the headline gains) is  more pathetic then anything seen on the same chart I posted at Trade Guild tonight, click on the chart and read the captions and you'll understand.

I'm probably going to release a few trades that look manipulated, we're going to have the opportunity to put another money making tool in the box and see how well it works. I'll also release the highest probability shorts going into next week.

Remember this about earnings:

1) more often then not there's a bullish upside bias right before earnings
2) sentiment counts more than anything else, even the best earnings and guidance are no match for market sentiment
3) Earnings aren't about what you did, they are about the guidance of "what will you do next qtr. ? "

So if a company does fantastic this last quarter, it can actually be a bad thing as traders will say, "I don't think you'll top that" and if that's the case, there's no reason to hold the company or buy it-they get sold off.

And last, remember this, everything you see and here from Wall Street is deceit; it's not just the little penny stocks that are liars, think Global Crossing, MCI, Enron, all the banks that said "We don't have anymore exposure to the housing crisis" until the next quarter's write-off's became public.

And....Don't fall in love with stocks, fall in love with your mate, chocolate, whatever, stocks are a tool to get from A to B and that's it.

Again I stress putting time into risk management planning. There are a lot of resources at Trade-Guild. I was published and won an award for my risk management planning.

So here's what we're going to do for anyone who wants to participate. If it's a rainy weekend and you want to win a month of membership to WOWS, send me your ideas and plans about risk management so that I can share them with everyone else here, I won't disclose any personal information (unless you ok it)  and may edit them for clarity and length. Which ever submission brings something really exciting and useful to the table will be the winner (chosen by me).

I also want to bring to your attention to the fact that there are a lot of talented traders here, I see it by your emails. There is also a comment section below each post and a thread can run as long as you want it to. Why don't we all help each other out and share our ideas and opportunities we see in the market day to day. Don't be shy, no one is going to look down their nose at someone who is contributing to other's success.

Have a great weekend and think about getting involved!

Nothing new

The mqrket has a slight negative bias but is mostly doing what I talked about last night.

Update

I won't be updating every ten minutes, I just wanted you to know that the Q's and the DIA look WORSE than even the SPY does right now.

5 min 4C negative divergence

1 min 3C negative divergence

BAC is not looking so good right now. However, Price is KING so I'd be comfortable building my short position or adding to it on a move below $14.60, especially on the close. Look for volume on a break below $14.75 and/or $14.60 that would not be good for BAC, but it would be good for a short position.

It's very early still

but the SPY is not off to  great start on these 1 min 3C/4C charts

Ambiguous

Ambiguous, that's the short term word right now. You must check out Trade Guild's post tonight as the analysis is exhaustive and I lay out a few scenarios. The 3C reading tomorrow will ultimately be the most 
useful, especially if the timeframes align. Right now we have a little upside left in the gap, we also have a chance for lateral ranges inside the gap for a few days, but I feel there could be one last false move as that is what we always see to fuel the next reversal. That move could come in the form of an intraday penetration above the top of the gap or even a close there which would kill all the short term shorts, and suck in longs that would be killed on the reversal down and they'd add the fuel to the fire.


Breadth today deteriorated badly. You can see all of that at Trade guild tonight.


I'm adding more shorts to the list so if you have some room left, just hold off until I release them which will be at the confirmed reversal. There were a lot of bad signals today, but the bullflag on the 60 min chart is the most bothersome to me, not that they don't fail, especially in this market condition.


This is the single greatest argument this week I can make for good risk management, it allows you the peace of mind when you have short term ambiguity but a solid long term outlook.


My gut says this bounce was good on the price side, but too short on the time scale. Perhaps a trading range? The analysis I see almost suggests that just because of the ambiguity.


As I ended the post with the single greatest signal will come from 3C and the moment we get a strong reversal signal (you'll have time to act), I'll have the shorts with the stops for you, right now I can't give stops until I see where they reverse and you need to have stops to figure out your risk management.


Check out the Trade Guild post, I've unleashed bunch of new indicators there and try to really pay attention to the price volume chart as that is one of the best, new indicators that Wall Street has a hard time manipulating.


Stay tuned tomorrow. We'll be out of the fog soon enough.