One Last Thing I Forgot

Price volume relationships today, it was interesting to note that all stocks had a dominant price volume of price down and volume up which indicates panic selling. The Dow was price up and volume down, which is the most BEARISH of the 4 possible combinations.

Here are those charts

 The 5 min 3C

 10 min 3C

10 min 3c

Inflation?

Today seemed like it was in slow motion, the market was very boring until it started dropping and until I got a look at that huge decline in the VIX today. Note that the VIX generally trades inversely to the market so when there's a peak in the VIX and it turns down, the market rallies and when there's an extreme low, the market sells-off, today qualified as an extreme low.

I placed vertical trendlines so you can see the relationships and noted how the April VIX area looks similar to recent VIX activity.

One reason that this may be happening (thanks to a good friend who sent me an article), capacity utilization is rising, commodities are rising, rents are rising, chances are core CPI will rise and we will have inflation. We'll have inflation in a market that has a lot of worries (fauxclosure gate, jobs, currency wars, possible trade wars, etc) , but certainly no improvement in job growth, this is a worry. When you pump more money into the system, you make it worse. So traders may be looking at this recent trend in capacity utilization=higher inflation=less QE in the markets and according to GS, QE2 is already price into the market, anything less then what is expected will crush the markets. Bonds have priced in over a trillion of QE2.

In any case, back to the markets.  I mentioned in the comments that if distribution keeps up in the 5 minute charts as aggressively as it has been, it will make it to the 10 min chart which has bigger implications, and so on. Here are the charts from today..


OK-sorry, I'm having problems with GOOGLE uploading images, I'll get them up as soon as it's working again. In any case, the 5 min continued down to make a 3rd consecutive low in a leading divergence, which has sent the SPY to a fresh new leading negative divergence low on the 10 min and the QQQQ in a leading negative 10 min divergence.

Another chart I wanted to post was the EUR/USD chart, the Euro continued losing ground against the dollar after the close. In fact the Euro is now falling into last week's  lows, it may surpass them. This is bad for equities.

Tonight I listed a lot of commodity based trade. If you enter more then 1 short or long, please look closely at what the company does. If they are too closely correlated, for risk management's sake, they should be treated as a single trade. In any case, commodities certainly trend much better then stocks. You'll find long, shorts, pullback trades, limit order trades and trades for execution at market open.

I'll keep trying to get those charts up. But you'll see, the outlook is not good. Even without 3C, the volume today was even lower then the Dow's volume on Friday which is to say it's lower then anything we've seen n the last 190 days -you have to go back to December of 2009. Today's trade showed ZERO follow through-not a good sign.

From the Comments...

NASDAQ Double Top, 3C's most important daily timeframe thinks so.

3c 5min Where it started

The 3C 5 min chart that showed a lot of distribution the last few trading days is now back to a very negative leading divergence.

DIA update

Intraday support was just broken on the DIA putting it into negative territory.

Are My Eyes Fooling Me?

Is there a bad data feed? Those were my two first thoughts when I looked at the VIX, remember, low readings indicate complacency and lead to sell-offs, high readings indicate fear and lead to rallies. Look at the plunge today in the VIX.

DIA

This is te DIA , but out of scale so I could show you more clearly. Two divergences, the last one saw a move down o very big volume. I'll keep watching to see f this means anything.

TYSON FOODS TSN

Tyson is a big meat producer, because of global weather and a few other reasons, grain based commodities that are used to feed farm animals like Tyson's are geting very expensive. I had a friend raising... well I won't say, but he had a huge production that was shut down in 2 months due to grain prices jumping. The profit margins just weren't big enough to absorb it.

Normally I'd think this was a false breakdown from a bullish chart-descending wedge, but I think this is the real deal. It's broken support, if you go short here, your stop is only about $.50 away. I think TSN is worth a shot here. It may see a bounce due to the amount it's dropped so quickly, you may want to figure in a wider initial sop until it starts trending down, then it can be tightened and more shares added.

Paint still drying

Not much, but there is a triangle formed up, so there should be some kind of head fake on that one.

Here's the 5-min 3C chart, the little move up at the end is NO a divergence, it is following price, so it's simple confirmation.

CNH is a long position to take a look at -Farm machines. This is likely to be a player in the food/grain shortage and it's acting well today.

Update

There's not much to update, thus far it's a pretty boring rangebound session.

We did get the insider selling vs buying ratio today, it came in at 1169 shares sold for every 1 share bought. ORCL was leading the pack on sales again.

The Euro has given up it's opening gap, there's a lot of news out on Greece this morning, not so favorable.

So when something happens, I'll let you know. For now you might as well just go back to bed.