Last post for the trading day

based on 3C, unless we get something pre-market that changes the situation, I'm looking for early strength in the market tomorrow, again, this is not a revision to longer term or strategic views, just an observation on short term intraday action

EOD Update

Looking at the DIA and the QQQQ, there is still 1 min positive divergences in effect. I'd guess we either see a run toward the end of the day or early strength in the morning. This is not a change of the long term trend, just information for short term traders.

False Breakout from the H&S

As I warned about the H&S, we have to watch for a false breakout, there's a 3C negative divergence you can see above to the right at the highs and price fell back below the neckline-it appears that this is another of the 80+% of false breakouts we have seen in recent months. So long as this holds and doesn't move back above the neckline, it should provide some downside momentum .

USO

It looks like the USO intraday trade or related ETf's you may have used it about over-at least for today. There's negative divergences and it's fallen out of the trend channel.

A H&S top?

Here's what I kind of thought we might see, a pattern implying intraday upside and we now have an intraday H&S that has broken out. The implied target is $114 , but as usual we have to keep an eye on it and see if it is is a false breakout.

SVNT triggered Long

This trade is from... I don't know how far back but the idea was a new intraday high as an entry as it was a limit order trade.  Check it out, it seems the momentum crowd may be in this one. Be careful and make sure to use a stop.

Update

Still a little worried about that wedge pattern, the 5 has produced a positive divergence-don't misunderstand, the position of 3C is still negative and down low, but it's little gyrations have produced that positive divergence.

Here's an example:

This shows the overall leading negative divergence in the 5 minute chart. Note the divergence-selling at yesterday's highs was quite substantial

However, here is the 5 min chart's positive divergence and you can still see that wedge pattern in the red trendlines.

SPY update

You can see the wedge and the 1 min positive divergence that led to the 11:20-ish move up, now it's in a negative divergence, that may be it, but in that move up we also formed a small bear flag so we need to watch that for any false moves as well now. Overall the chart looks bearish as do the others.

USO has been lateral now for awhile, positive 1 min divergences persist there.

USO

There's that break I mentioned, 3C is still positive so this would be the area to get involved with a stop just below this low. This is a possible quick trade, you don't want to let it cost you much if it fails as it is  hard entry. I'd probably cut my portfolio risk to a fraction of a %, meaning it's speculative.

MArket Update

The SPY did break the $113.50, the development that is a little concerning is the intraday wedge forming in SPY, if this wedge breaks to the upside, it should retrace it's base to the $114.40 level. There's a slight positive divergence on the 1 minute, every other timeframe is solidly negative-this is what I look for to pinpoint a reversal so lets see how this develops.  A break below $113 should make this a moot concern.

USO update 2

Both relative and leading positive divergences

USO update

Looks like thus far USO found support at yesterday's lows, often we see a shakeout below a level like that before a move starts up. 3C is climbing, not quite in leading position, but definitely in a positive short term position. This would be a short term trade as well if you decide to go with it. Just watch that it doesn't slip too far below yesterday's lows. A reasonable way to trade it would be to set a wider stop with fewer shares, if it starts making higher highs, higher lows, then add to the position.

GLD KNEE-JERK REACTION?

WELL IT WAS UP A BIT MORE LAST NIGHT. With the dollar being so low, there may be fears of more Japanese intervention, worse a currency crisis. As is always the case (whether it's the case with GLD remains to be seen) the initial reaction to FED policy is mulled over and typically reversed.

The SPY did test that $113.50 level and bounce from there a bit, but if it hits $113.50 again, it may not bounce a second time. A break below that level would open the door to a long stretch down with very little support.

Update

Thus far the SPY is breaking some pretty serious support levels, the next test is at $113.50, I'd think we'd see at least a bounce around that level, but volume is increasing unlike other pullbacks.

It looks like the Inventories report wasn't bullish by looking at the price reaction. There is 1 positive divergence, if you take the trade, simply lower your risk on it, and keep a trailing stop on it. If you enter it, email me for the stop-whichever derivative you use.

Morning Start

It's a light day for eco-releases, just Crude Inventories at 10:30. Be ready for a possible trade there, though it will be after they are released as unless something just really jumps out. Some of the better USO trades have been is a divergence after the release.

Gold futures which were up about 3 points higher on GLD overnight are down a bit from the overnight highs so that's another I'll be watching closely today.