Okay, tomorrow looks like we'll get some kind of bounce, it's likely to carry over through Monday if the close is strong. This is not bad news (review the charts of the 2008 H&S top and the Crash of 1929 to understand what I mean. We will not be trading anything counter trend right now, unless you choose to or unless long trades on the list trigger. However, a bounce should set up at least 40-50 really nice shorts when we get to a reversal, assuming the analysis is correct and the bounce occurs.

In this video you will see my new tick indicator, it's not perfect but I'm close to having it where I want it and it is in sync with 3C so it's definitely working and is a totally different method of confirmation. This will end up being a great tool for our members and when it's complete, I'm more then happy to share it with anyone using StockFinder-links to TeleChart and StockFinder can be found at the top of the site. Just be patient, don't let them play on your emotions, that's what this is all about and realize that we are standing on the edge of an amazing opportunity. Nows a great time to really hone in on your risk management plans. As always, email me if you need me, except tonight I'm finally going to spend a little time with my wife. Enjoy!

Oh and for a larger view, click on the video and please don't forget to rate it!

Last Update for the Trading Day

I've made a lot of the ability of Wall St. to scare people out of their shorts and bring in the mindless longs that want to believe the market is always a bull market.

In any case, there's been another round like yesterday, of accumulation since 2 p.m. They didn't break resistance on the first pass, they didn't want to, they wanted to buy cheap and sell high. Now they've gone ahead and broken the first resistance zone. $109 will be a biggie for a lot of traders and we're almost there, I'd guess that they will take out $109 to grab attention and get the AH market in a tizzy again. Although this is a bit different, yesterday they were accumulating in AH, today they started early and probably want a nice run in AH to gap the market up tomorrow. Like I said last night, this is what I need to find some good short set-ups and it doesn't bother me one bit. If you look at the charts of 2008 and 1929 you will see that there's no such thing as a sell-off that just goes straight down, it's not a money making prospect for Wall St. To accumulate cheap today an sell high Friday/Monday is where the play is at, however, it's just a play. After the initial 1929 break of major support we saw that 7% gap up and about a week of higher prices, then it all fell down. It's actually good for a short position and this is why I say "phase into your positions-not all at once if you can help it" because of maneuvers like this. It's also why, even when fully loaded, I keep 25% in cash to be able to take on these plays.

So yesterday the divergence was there, with the jobless claims it made no sense to have a positive divergence, but as always, my logic is never competition for what the chart is saying. Now the chart is saying there's a high probability of a bounce Friday which means probably Monday as well. This will set up nice positions on the short side.

I'll post charts tonight, short term traders that have a profit in shorts may want to take some off the table-it's your call.

See ya soon.

2nd verse same as the first?

Here's the 1-min, I saw this developing and watched to see if it broke resistance, it didn't, it went lower and formed a bigger positive divergence

1/3 5 min charts-this one is showing accumulation here as well. It appears there will be something similar to yesterday-that positive divergence we saw, I already mentioned the star/doji reversal patterns I've seen today, so it looks like they want to take this market higher. Like I have said, I do not vie this at all as a problem, look at 1929 again and the 7% gap up after the initial break, with the rest of that week in rally mode-then came the 40% sell-off. 

This is typical Wall Street manipulation. Just understand it for what it is.

5 min breaking for now

The 5 min finally going negative, I'd really like to see it go into a deep leading downside divergence, we'll see.

The one minute has been showing distribution all morning, there was early buying by the middle men and they sold into strength, now it appears they are done for the moment.

More perspective

I didn't name the stock or date here, but it broke down big to see a 6% jump in a day, plus about 4 days of rally. I'm sure this scared a lot of shorts and calmed the bulls, but.....

Take a look at the same chart below, note the symbol and date

Update 2

Here's a few stocks that are in pretty good short position right now

WLT
GS
JOE

Looking through the charts, I'm seeing-as of now- a lot of star formations, a loss of momentum to the downside and a higher probability reversal formation. What this means is that we may very well see more upside so any short trades should be phased into in case you get better positioning at higher prices.

One event that I expected to take place and didn't was a false up side breakout from the wedge, it would be very scary for anyone short, but be very helpful to fuel downside momentum. If we close like we look right now, I would expect more upside, just go back to that chart of 2008 though an look how the market reacted during a breakdown that created a 50% sell-off, like I told you, they are really going to try to scare you into believing that the rally is alive and this was a momentary blip to the downside, this is not true. We will see, for now though that is what I see and going into Friday it would benefit Wall Street greatly to have a strong close for the weekend to suck in the bulls on Monday. Again, study the 2008 crack from the wedge, we had a week of nothing but rally, but it was just a distraction, a trap, the scare tactics I'm talking about. Look at the past, put yourself there emotionally, then you will better understand all that is happening. I am not phased in the slightest even if we made new highs in the market, this market is in huge trouble, but Wall Street will play its games. Use Jedi focus, meditate, stop watching the chart, whatever you have to do, just don't let them hit your emotions and cause you to react out of emotion-that's the game right now.

Just Information

This is the equivalent more or less of where we are now and heading-back during the H&S break of 2008-same wedge, a lot that was the same of you read the recent Trade-Guild articles.

You can see actual closing days down just edged out closing days up-the white box represents the top in which we saw a 50% decline from there. However, if you just count days that moved the index down, you get  only 13, the rest are bounce days, so as you can see, even during one of the nastiest down trends in a century, the market behaves in such manner to convince Bulls who are full of hope, to re-enter the market and to scare shorts (many of whom believe they are exposed to unlimited loss which is not true) into covering.

The crash and the Great Depression had 5 big bear market rallies, each of which I'm sure scared investors into going long as the trend continued lower. We just went through a historic bear market rally since Q1/Q2 2009, it will be written about and studies in retrospect for a century or more, same as I study the Great Depression, but you have to see how the market functions, and now it's even more manipulative then this. So study this time and try to put yourself emotionally in the middle of this, you will come out with a much better understanding of what we are going through and will continue to experience now.

Another 1 min negative divergence,

Like I said, until the 5 min falls apart, this can keep going on, right now we have a 1 min negative divergence, suggesting this last bounce will pullback a little, we'll see buy don't be surprised to see prices into yesterday's trade

Over Already?

This is a 1-min negative divergence, you see price rolling after it. The 5 minute is still fairly healthy so it leaves the door open to another 1 min divergence forming and bouncing again, but I'll keep an eye on it.

The bounce

So the New Claims was the latest in a series if heavy hitting economic reports that are all starting to indicate there is no moderation of anything in the economy, apprently there is an acceleration of bad news. QE2 GDP is already being rumored to be cut to 1%-that puts us dangerously close, right now to a double dip and this is why I opined about the Fed's apparent lack of will to get serious and get in front of this thing, not that it matters to me as I'm a shrot, but it shows and tells you something very important, I think you can figure that out for yourselves.

So we had a positive divergence yesterday and some deep discount buying in after hours, this brings average cost down, to what exactly, I don't know but it means they don't have to bounce it as high as where the positive divergence strted as the average cost would be less.

1-min 3C

5 min 3C

As you can see the divergence is still there, but showing some movement that may be the start of a reversal. Between what was bought at EOD yesterday and in After-hours, I suspect we have probably are close to passing the averaged cost paid so that means they are into profit. How high does she go? $109 is a serious level of resistance now, certainly $110 (SPY) and $110.70. I don't see the first gap created yesterday morning being filled-that's a classic break-away gap. So this is a good opportunity to look at the shorts and the inverse ETFs on June 3rd of the June list and perhaps start slowly scaling into positions you like, when the reversal comes, you can add a bit more, but figure out how much you want to risk and build the position, you don't have to buy everything all at once.  THIS IS NOT DOLLAR COST AVERAGING THAT I ALWAYS SAY TO NEVER ENGAGE IN because dollar cost averaging is in response to a losing position, this is pre-planned building of a position.

So we'll keep an eye on it, but remember that bounces are meant to be scary, they are meant to take your shares so they will often carry further and faster and perhaps longer then you might anticipate. The point is to separate you from a good position so they can take it. Don't let them scare you, you guys are the wolves, you guys understand how the game is played, shrug it off, laugh it off, just don't be run-off by sheep. If anything serious materialized I would let you know. Just use this as a blessing to help you get better positioning.

This counts!

This seems to be the bounce and this might explain some of the buying in after hours. The divergence appears to be still pretty solid.

NZT

From 8/8 just triggered a short