NEW TRADES ARE UP

WE HAD 3 TRADES TRIGGER FROM LAST NIGHT'S LIST, ALL UP-ONE OVER 5+%

SET THOSE ALERTS!

This is part of the equation

http://www.zerohedge.com/article/21st-weekly-outflow-confirms-investors-refuse-be-suckered-market


21 WEEKS! Investors are apparently a little smarter then the Fed realized. This would tend to explain why the pros have seemingly put on the short position that 3C has been showing. At some point money down the drain is going to find a more useful spot. Like I said in my 2007 5-part video series on "Bubbles" -"It's like food poisoning and you'll do anything not to get throw-up because who likes that? But until that poison is out of your system, you aren't going to feel better". The same applies for this market. I've been expecting the second shoe to drop for awhile, I thought it would be worse then the first, now I'm sure it will be and we'll all probably have to figure out, and fast, how to trade a secular bear market. Investors know that we can't be at higher level then a year ago when the data was optimistic. We have sliding GDP headed straight for a double dip, you can't ignore that with a good housing report here and there. I've never seen market averages behave so erratically, penny stocks yes, averages, no.

If the government ever wants the institution of capital markets to return, to see insiders willing to invest in their own companies, there's going to have to be a purge. The pension funds screwed up, no hyping the market is going to give them the 8% a year they have figured in to make up for their underwater funds.

Investors are getting out while the getting is still good. So who's going to be holding that position when the damn breaks, it doesn't look like institutional money?

I do believe in karma, the law of the harvest, you get what you give, sometimes it just takes awhile before it's realized. What they have done with this market in any other circumstance would be outright criminal.

Maybe this time next year traders will be trading foreign exchanges where outright corruption isn't called "policy".

On that note, unless something changes, I'll stay largely short because it seems to me that the writing is on the wall and the fall could make 1929 look like a pullback. I don't think "Bubbles Bernanke" has enough fingers and toes to plug the leaks in the damn.

You Never Know Until You Do.. Or, You Don't

For sure, you never know at the time what the plan is. If the Fed is artificially acting as bidder of last resort, then that raises serious questions as to why Market Makers and Specialist who are obliged by law to take on that responsibility are being overshadowed? Is it that the middlemen know something and the spreads at which they are willing to take an offer are so ridiculously low that the Fed has stepped in?

Market makers have sure been busy busting apart price patterns with false breakouts to earn a living lately.

And why, if the Fed is indeed bent on being in the market, assume to keep it artificially high (think about prices a year ago and the sentiment then versus prices now and the sentiment-you have a huge conundrum as there was HOPE a year ago and now the economic news is nowhere near what it was back then-still we are higher) then why in the world will they not go to $115-this chart below shows at least 10 opportunities, and we've seen what they can do when they want, in which the SPY was within $.20 or $.03 of above $115 intraday. Why won't they close it above $115? Is it a case of the higher you go the further you fall? I can't imagine a reason why mutual funds wouldn't want to see that to stem the outflow of money, hedgies apparently or someone apparently is on the other side of the trade with all the distribution.

One thing is for sure, we're not getting the story and there's a reason for that, I'm sure it's not a story that would inspire confidence in our markets. What will happen though when there really are no bidders and the Fed finally steps back? We've already seen a couple examples this week of the circuit breakers fail.

This market is far more insane then I've seen in 12 years and I thought Q1 2009 was crazy.

Here's the chart

Maybe we'll find out, it won't be before what's going to happen, happens though.

Another Waterfall Sell-off

Just more evidence of two things, no human bids in the market, and algorithmic black boxes running the market. It's possible that they may have kicked in as the SPY failed for a fourth day to take out $115.  This volatility is gut-wrenching for day traders on 10:1 margin and for anyone else in the market and it is causing more and more people to flee the market. SKY NET is here and another example of the Fed's law of unintended consequences-at least that is what we'd hope.

Unstable

The last several days, the market has done essentially nothing, it's trend can only be classified as lateral, these are times when w see distribution historically, but what is really disturbing is the volatility in an INDEX. Below is the SPY, look how many parabolic moves there are, this is from a lack of participants. This index is trading like a penny stock. The huge gaps, parabolic moves, etc.

The next 3 charts are the SPY, DIA and QQQQ in the longer term 3C, note the similarity in the divergences, all of which are classified as leading at this point although they could be worse. This shows a pattern of underlying distribution. These are uncharted waters with the Fed's POMO, but I sure would be leery of being excessively long right now and truthfully I'd cut my risk back by 50% until we see a resolution.

I Wish I could type with more then 2 fingers

"hunt and peck" I call it.

Any way, while posting the GLD post, SPY, DIA and to a lesser extent the Q's all went negative. They are lower then their last negative divergence.

Fool's Gold

Watch out in GLD, this leading divergence on a 5 minute chart developed quite quickly.

Market Update

The DIA and SPY are in negative position, but not negative divergences yet, I'll show you.

As you can see, our last negative divergence where the red arrow starts shows 3C sloping down and prices are higher. Until 3C makes a move lower, I can't call it a negative divergence, I added an orange arrow to the end of 3C at the right to demonstrate what I'd be looking for.

As for AAPL, remember I said the first break was likely to be a false break and we'd likely see AAPL move back into the triangle.

As you can see, the first arrow gave us a hint at a relative positive divergence, the second is a leading positive divergence so AAPL is likely headed back above the breakdown point, this is done to take money from technical traders as they all pile their orders right at support or resistance, it makes the market maker money, it doesn't really mean much as far as the trend goes. We've seen the same support level broken, crossed and broken 3x in one day. Traders just don't learn, instead of listening to the chart, they read books and that causes them to all do the same thing and make them easy pickings for a market maker or specialist.

So You Understand- SMH Charts

This is a 1-min 3C chart for intraday moves. The first white arrow shows at the end of it, price making a new low just before 11 a.m. The blue 3C indicator is significant;y higher then it was around 10:15 indicating accumulation and from there prices reverse to the upside. The red arrow starts where distribution of the accumulated (probably market maker/specialist trading their own account) shares begins. You can see a new high in price around 12:15 or so, yet 3C is significantly lower then it's 11:30 position, this indicates distribution and marks a turning point. The current white arrow looks like early accumulation.

This is a more significant 5 min chart which can call changes in the day to day trend. You can see accumulation at the white arrow at the price lows. Then 3 subsequent negative divergences, price is higher in all 3 then the 11 a.m. area, but 3C is lower. The horizontal line at the bottom is the area where I'd like to see 3C cross below, this would be the start of a leading negative divergence as all the others were less powerful relative divergences (relative between 2 points on the chart). A leading divergence tends to pull price down with it. This is what I was talking about in the last post.

SMH back to a small positive divergence

with the Q's the way they look, the SPY now in limbo, I'd expect we'll see another move up in this very choppy market. There are 5 min divergences in many of these stocks that are borderline leading negative. If that happens then we should see a more definitive character to today's trading.

The Q's Hanging on stubbornly

The Q's have actually formed a small positive divergence. It's on the 1-min chart. The 5 min chart-which is more substantial and takes longer to turn is in a negative divergence, so maybe a move up and then the 5 min divergence kicks in....

SMH/SPY

The correlation seems to be back to a degree, the same consolidation in the SPY right now is exactly the same as SMH, so when/if  SMH reverses down, SPY should continue down

SMH

Looks like it is getting set to make a turn downward on 1 min charts.

Leading Divergences 2/3

The SPY and the DIA have gone into leading negative divergences, suggesting in the short term-over the next half hour or so, price should follow them down, the QQQQ is negative, but trading with price and not leading, not yet any way.

AAPL

There's a huge triangle forming in AAPL. Yesterday there were a few sales that really knocked AAPL down, I'm not sure where this is headed, but the initial breakout, may be correct in direction, but it probably won't be the only breakout as this pattern is so obvious. I'd keep an eye on this one as a barometer of the market.

Right on the nose

Literally one minute after I hit the "post" button. Lets see where this is going.

3/3

We now have 3 negative 1 minute divergences, so there should be a turn down soon, -how far down... we'll have to wait for the 5 min divergences to form.

Market Makers/Specialists Games

They just took the SPY down to 114.02, with a one -minute hammer reversal, thereby insinuating support is safe at 114.00 as the human mind gravitates toward the whole numbers anyway. Now watch the volume when the market breaks $114.

Morning Update IT'S ALIVE

APPL's 1 min chart yesterday looked like it flatlined, I guess that's what happens when your not the Patron Saint of the market on a POMO day, today it's actually got some movement. It's a little difficult figuring out who the market's following today and maybe it's not following any Patron Saint, this may be one of our better opportunities to see what exists in the absence of POMO, what real investor sentiment is like, or as close to it as we can get.

Thus far, it seems pretty appropriate we're in a trading range, "Dazed and Confused", but that won't last for long, the market makers have to make their nut too and with little volume they'll be looking for the stops, which right now are probably sitting above and below the trading range, so watch out for a CRAZY IVAN.