PErhaps this is part of the reason

in which I've been seeing Chinese based ETFs and other developing countries showing negative divergences.

http://www.zerohedge.com/article/chinas-growth-rate-destined-be-cut-half

Update on the market

So far the positive DIA 5 min divergence is still holding by a thread. The SPY has gone into trading in-line. All have 1 min negative divergences and we've seen some of the downdraft from that in the last 15 minutes of so.

The TICK volume is trading in a straight band with a range between +750 and -1000. A breakout either way from that band should dictate the markets direction into the close. As I said before, TICK volume is a very helpful tool when drawing trendlines of the channel it's in and watching for a break of that trend.

RBY Short

With so many Gold miners looking bad the last few days, this is one that has already done a lot of the heavy lifting.

The blue line in my Trend Channel. The current stop is in the red box, but it moves down everyday with the trade and will start moving down a lot faster. It often is able to keep you in the trade during consolidations as well. The big red line is support that was broken (the heavy lifting). This line now represents resistance. I think you can move the stop at this point down to $4.05 or so, it'll probably be there monday. so the risk/reward, as long as you use risk management of 2%, is fairly decent if your broker will let you short it.

Daily charts

I found these two charts interesting as it's been awhile since I looked at the daily charts.

The DIA daily in an obvious negative divergence, not even as high as the last rally. Also if it were to close where it is at right now, we'd have a bearish engulfing candle swallowing the last 2 previous days.

The same applies for the SPY, except it needs more downside today to swallow the last 2 previous candles.

Two more ingredients to throw into the pot...

This is the second time the moving averages has neatly crossed over into a bear signal on the EUR/USD pair, today's cross was pretty quick.

UUP, the dollar proxy just closed the gap from Wed/Thurs. and on very heavy volume. Typically a stronger dollar means weaker asset prices, including commodities, Gold and Equities. One day does not a trend make, but every trend starts with a day.

May see the 2:30 Ramp Up

In any case, certain stocks such as the goldminers an financials have take a turn for the worse.

The DIA has a 5 min positive divergence, the SPY is a little more positive then trading in-line, but not an all out divergence and strangely the Q's have a 5 min negative divergence. Both the SPY and the DIA are in obvious manipulative patterns (triangles) so whether this is a black box head fake or a pump into the close is difficult to say. The other difficult thing to say is whether there will be a "sell te news" event as traders may not have been as inspired by BB's comments this a.m. which were ambiguous and not what the market wanted to hear in terms of specifics-weight that against Yellen ( a known Dove's) more hawkish speech on Monday and we have a pretty good soup bowl of uncertainty.

Gold Miners

Here's a list which does not include the number of gold mining stock down today, but rather ones that have made significnt moves in the last two days and are in jeopardy of a reversal.



IAG
ANV
AUY
ABX
HMY
GSS
RBY*
GFI
GBG
AEM
GORO
AZK
EGO
KGN
CGR
RIC
NXG
BRD
AU
FRG

RBY LOOKS ESPECIALLY BAD

 RBY 30 min 3C, very little accumulation compared to the distribution

RBY has broken the range of support, this is one to consider as the risk/ reward equation is pretty good.

So Far USO has taken out the last 15 trading days

UUP and USO

As a member just pointed out, look at the volume in UUP..

That's a lot of volume in UUP

USO's 3C hourly chart is now in a leading divergence to the downside.

DIA 2nd Test of Support...

So far support has been hit twice. The pattern forming is similar to a bearish descending triangle. However as we have seen time and time again, the black box systems search for these patterns to cause false breakouts and generate volume which they make money on in terms of the spread and rebates. don't be surprised to see an upside breakout before anything drastic happens.

GLD uncharacteristic lately

 Large volume today, the last time was on a decline, today another decline.

3C, a good reference point for a turning divergence is the rule of 3, 3 consecutive divergences and then a turn. That' basically what we saw here. I threw in Money Stream just to show the volume is definitely on the sell side. Again, today's action, besides being a POMO day is about expectations. How the market closes today, will largely be about whether investors feel disappointed in Bernanke's speech and and there was a lot of ambiguity there, or whether they feel business as usual will ramp up again. It will be more difficult with the financially heavy SP-500 to make headway against a back drop of bank troubles.

The dollar appears to be in a consolidation, I'd think the momentum seen this a.m. will keep up for at least today. The moving averages in the EUR/USD are now crossing down again.

Rumor? We'll find out in 7 minutes.

There is a rumor that the Treasury Department is going to release a report at 1 p.m.naming China as a "currency manipulator"

The impact of this in unknown but could definitely affect fund flows as well as other political ramifications.

We'll take a look at AAPL before the close

As they report on Monday I believe.

This is the chart I mentioned a few posts back.

Sometimes it's easy to see the distribution in longer charts, but sometimes you see it the last half hour or so in the short charts, I have a feeling AAPL will be more like the latter.

Knocking the Darlings off their Highs

It looks like the market is about to take AAPL, NFLX and AMZN lower as AMZN and AAPL put in essentially a double top with 1 min negative divergences.

DIA is at Secondary GAP Support

I've always said, gap support is the strongest support you will find, stronger then tested support trendlines, stronger then moving average support. We are at that gap for the second time today so watch for a little battle to brew as bulls and bears wrestle over this important level.

On the Other Side of the FAZ Trade

XLF isn't looking great this a.m.

Not that I would short XLF over buying FAZ, but for those who would like to receive the benefits of being short (read "Making More Then 100% On A Short" @ www.Trade-Guild.net) there are plenty of banks that are behind the weakness in FAX. I went over a list of them in last night's post. Fauxclosure gate is ever-deeepening and the ramifications are becoming worse with each passing day.

I hope you got some FAZ

It was and probably still is a good risk/reward trade. FAZ looks ready to continue higher.

Something about the way she looks

BAC is not looking good here, take a look.... Is it any wonder why. I'm in a musical mood today.

That's a small bit of accumulation and a rather large bit of distribution. I'm expecting downward pressure to continue in the banking sector, starting with BAC.

The POMO Darlings-

Monday is the next round, some call buys or just buying around 10 a.m. may be just the trick. Just be careful with AAPL, I believe they report on Monday and this one is pumped to space and beyond, could make for a nasty fall.

Looks like this leg up may have run out of steam.

The volume was light on the leg up, there are 1 min divergences set up and it appears it's about to form a reversal back to the downside with POMO completed at 11 am

UUP change in character

Not only did UUP see huge green buy side volume today, but there are leading divergences in both 3C 15 minute and Money Stream

TZA

Keep an eye on TZA

 TZA 5 min looks like it has the probability of pulling back a little bit

But the 15 minute chart looks very good.

TZA is at it's lows so a stop a little under today's lows would make for a rather low risk trade, especially if you use the 2% rule.

DIA

Has just taken out the gap resistance it almost hit yesterday.

The dollar has taken out 11 hours of an uptrend since it started it's trading day, and all in the last 2 hours.

EVEN GOLD?

Gold took off after Bernanke spoke, it's down in GLD substantially

So Far

The DIA/SPY are sliding on a bit heavier then normal volume, especially the DIA. The Euro is dropping pretty hard against the dollar since Bernanke spoke.

Was it Enough?

QE2 is guaranteed in the minds of investors, it has been for some time, even the rough size has been guaranteed. The question now is, did Bernanke live up to their expectations today, or did he disappoint.

Furthermore, unbelievably there was quite a disparity between PPI and CPI-that's a hard one to swallow without scratching your head, but the eco numbers were good today, better eco numbers means potentially less stimulus. So the market today should be back to what the market is about, sentiment and expectations.

We'll see how investors swallowed this mornings Bernanke speak.