3C is Working Again

Whooa, I have a bit of imagination, but this is based on the charts, events, how the market works and common sense.

We are in the land of bad is good and good is bad. Today's GDP report explained it all and this thing is bad, much worse then the number itself were the revisions, this is what I believe Smart money was missing, they knew the main number but I think they didn't have the revisions which may not have all been available. It explains why 3C stopped working and it puts my mind at ease.

I have it all up at Trade Guild, I'll be working on our end of things, but the bit of worry I felt about the last few days, is quickly dissipating as this economy is sooo much worse then we thought and the options available to fix it are few and many could make it worse. From an economics point of view, I think we are in better shape then ever.

Take a look at the post on Trade Guild. I'll be working on trades for next week and a new indicator for you that I've been putting together in my head. What happened at the EOD should put you at ease to some degree if you are heavy on the short side, I told you to watch for it, it came and came hard.

I'll be posting this weekend so check in and checkout the post. I learned some new things this week.

Range Broken

Things are happening fast right now, very strange. The a.m. range was broken to the upside just minutes ago, now it has to hold above that range at $110.65.

If we see a move below that range /support, watch for heavy volume as a sign of a false breakout. I wish we had another two hours today, but we don't so lets see what happens in the 30 mins left. Most likely algo-trading programs are running the show right now.

A Reversal of a Reversal?

The last positive divergence looked pretty strong, now we have (2 of 3) 3C 1 min charts in some variation of a negative divergence and for the first time we have the 3C 5 min charts with 2 of 3 in negative divergences and 1 inline with price. Finally some movement.

There's not a lot of time in the trading day left though and the 5 min divergences usually take at least an hour to materialize in price.

Update ...

In white, this is what I guess would be the a.m. trading range, the blue arrows and box show positive divergences and a leading divergence. We have to watch for a break above the range at the $110.70 area.

Currently the TRIN is at $1.29 which is within the rally range. So now it's a matter of resistance, if we break and hold above the range, expect a close higher. Watch for further updates and check out the longs I posted last night.

Afternoon Update

5 minute charts are strangely still not moving, but this one minute chart is about as unhealthy as you can get. It almost makes no distinction between rally and sell-off as its trajectory is solidly down, the same with the longer version in blue below it. Note the pick-up in volume recently as price crossed $110.

Update 1

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This is the first 1 min divergence in the SPY, as you can see I posted it a little late because I'm still waiting for there to be some action in the 5 min chart, which there is none, it simply follows price. I have not seen this before, it is not a problem with the indicator, it's as if only market makers are participating in the market, almost like smart money just disappeared. The only explanation I have is what I offered last night, that they are laying low being the end of the month window dressing and will become active again next week as the new month starts, however I would expect to see that more at the end of a quarter, not a month. In any case, I will continue to monitor it for you.