It's MAke it or Break It

Today we had several trades trigger and several more add to nice gains. Thank you for the emails today from members that traded the update of the breakouts and made good money-options aren't my thing, but if the updates helped you make money, I'm very happy.

3C was clearly correct in calling the strength early, however, the distribution isn't done and I believe I know why the SPY is sitting right in a zone of resistance between a closing breakout and and intraday high breakout. IT seems to be wasting time, setting bull traps and distributing short term trades.

All of the information which I really want you to read carefully, is at Trade Guild as this is a defining market moment. I'm pretty sure after you read and see what I posted, you will be of the same opinion-the market is waiting for the jobs report on Friday and it appears, as we have been able to see the institutional movement in earnings, we are seeing a leaked jobs number and if 3C is correct, it won't be good. Keep that in mind when you are setting stops for long trades.

Tomorrow, as you will see, I have every reason to believe we will see downward price pressure, the divergence I used last night to call for early and mid afternoon strength is even bigger tonight, but in the opposite direction.

You will see how the dollar is gaining momentum which is bad for the bulls in the market. UUP is a good looking trade right now, I'll put it up in the a.m. but I would consider it a buy now.

Again, the highest probability trades, until we get the start if a reversal are on the list with limit orders-3 triggered today-all for upside gains and GOOG added more for those who bought it earlier in the month when it first appeared-actually in July. We should see more breakout-limit triggers tomorrow, I think specifically in the cheaper stocks so make sure you have alerts set and I'll update as they trigger. If you get a trade that makes a decent profit in the cats and dogs, I'd consider taking some profits before Friday's jobs report. I think we have one more day of the same old or decline but close to the resistance zone. The trades I have setup are pretty safe as they are on limits. Once Friday hits, you'll start seeing the "AT market open trades" which are a bit riskier, actually in a clear directional move they are not, we just aren't there with Friday's report, but these trades are the ones where we can make some serious money and if the report is as I think, then the core positions on the short side will start making some serious money.

I'm going out on a limb and saying this-I believe from what I have seen, the traders on Wall Street have been setting up small trades and using the momentum to make retail traders chase prices as Wall Street sells and goes net short. The 1 min negative divergence you will see at EOD at Trade Guild is extreme and the position it occurred at suggests short selling in large quantities.


The GDP was bad, a bad jobs number and I am saying right now that I believe preliminaries have been leaked, will sink this market. Read the post at Trade guild, if you have questions email me. Get familiar with the shorts, even ones that have stopped out as tomorrow I will revise the entries and stops during the day. 


There-I said it-leaked numbers, disappointing jobs report-market reversal and shorts will rule the day.

Update 3

From the charts below, both the 1 and 5 min 3C charts on the SPY are close to making new lows while price is near the morning highs. I would think that this will be a level of resistance that should come into play .

Likely resistance from this morning's highs

Afternoon Update

We now have solid negative divergences in the SPY and DIA and a divergence, but not as strong in the QQQQ. It looks like we'll see a reversal here to test the $46.60 area or around the opening gap. That is first real support. A move below that would likely come on heavy volume as stops are likely piled up in the area. So we need to watch for whether the market makers/specialists are just running stops in which case we could see a range bound afternoon until the EOD or if price breaks and heads for the days lows. A break of those lows and the probabilities of that lower close are very high, volume should pick up in that area as well.

If you are trading any of the breakouts, set stops if you are looking for quick gains, the GOOG trade is the only one that I can see the possibility of a trend lasting over a month. While the others have the possibility of more gains, they do not have the same set up that Goog has. If you are in any of these trades that have already produced an opportunity for a nice gain, feel free to email me to discuss stop ideas.

The Dollar Index

The $US Dollar Index just had a nice move up (via UUP) vs the Euro. Yesterday I saw UUP developing a 1 minute positive divergence, which led me to believe we'd see strength in the Dollar today and as it "generally" trades inversely against the market, this was part of my market analysis.

As it only had 1 timeframe that was positive, and 1 minute at that, it didn't make for a trade, however now almost every other timeframe has fallen into line very quickly.

SPY in green, UUP or the US dollar in Red. Note the inverse relationship between the two.

This is the 1 minute positive divergence I saw yesterday

This is the 10 min chart now in a leading positive divergence.

This looks like it could make for a decent long trade either here or on a breakout from the downtrend around $23.76. UUP is a leveraged ETF for the dollar index

3 Trade Triggers

These 3 have triggered this a.m.

GOOG long
ISPH long
NBIX long

Take a look and see if they are for you