The Earnings Calls

I was looking for more earnings calls for today after hours, but there wasn't anything available. I'll be looking for Monday AH.

The final tally is somewhat disputable, there was 1 undisputed miss, there was 1 that is borderline and I think in the days ahead it will be confirmed as a correct call. So out of 9, 7 were correct or could have mad money off of.

ACTG Short was the bad miss, up 19+5 on good volume.

ALB is the disputable one. It put in some nice gains today to see them all erased and formed what is nearly a VERY impressive shooting star with a huge upper wick/tail. I think this one is the one that will decline as 3C suggested-it certainly saw it's gains sold off today.

AMZN was called a short and the 4% gain it put in yesterday was totally destroyed after hours being down I believe over 5% at one point so if that was shorted near the end of the day when I posted these, there was an easy 5% 1 hour gain. Today it was up about 2.5%, but even that looks like it'll be erased next week.

RVBD long came in today with a 18.31% gain, but intraday it was well over 20%-that's the kind of 1-day gift you take or at least take your initial investment off the table or a portion of it.

SNDK short looked like it wasn't going to be correct, today it was, albeit a small -.38%, it was a nasty candle that totally engulfed the previous day's very nasty candle-both on very high volume. This is one to keep an eye on in the days ahead.

PMCS Long had a nice day today up 6.7% on HUGE volume-look for further gains and confirmation here.

RMBS Long was up .73% today on a nice reversal upthrusting candle. This should see some more gains in the days ahead on a reversal.

AXP Short was down today about 3.15% on a bearish engulfing candle with big volume. This is an important stock to monitor as a market bellwether . From the looks of this chart, I think we'll see follow through early next week and possibly a trend.

LEG Short was down on a HUGE candle and HUGE volume. today's decline was 8.61%, but you could have booked over 11% last night in after hours trade. Either way, it's looking like another that'll show confirmation next week and continue down.

Check out today's trade SONC. Also don't forget about a bounce trade mentioned last night in GLD which put in a reversal pattern today (Harami) and oil (USO) which already put in gains today had you bought it on the open.

The FX pair, EUR/USD is continuing down. The small H&S top that is within the larger top (it makes up the top of the right shoulder) will reach it's neckline around $1.3920. The larger pattern's neckline is at 1.3775. After this area is penetrated, you can probably consider the dollar to have bottomed, whether for a swing trade or what is starting to appear as a longer, bigger rally. Possibly a multi-year high depending on how this develops. A few weeks ago I saw the distribution and couldn't imagine this happening, but here it is, we are 3/4s the way through the Euro H&S top. This doesn't mean that there isn't room for a bounce in GLD and USO, there certainly is, however in that case we are looking more at the trees then the forrest.

In news today Fitch placed a number of financial institutions on Negative Ratings Watch including BAC and C.

This weekend we have the G-20 meeting...

As you may have heard, WikiLeaks is about to release or has released it's biggest set of leaks EVER! Over 400,000 documents are coming from W.L. Warnings have gone out to the Iraqi government. Should be interesting.

Gold, as 3C has suggested, made it's first weekly decline in the last 6 weeks. This is due to strengthening in the dollar, also another 3C event recently.

Las Vegas is at 15% unemployment-now consider that is just the U3 number, you can nearly double it using the more robust U6 number. Yesterday the U6 number was estimated to be 22.5%, during the Great Depression the worst rate was 25% and it was counted almost the same as U6.

I'll be adding more stocks to the spread sheet tis weekend, quite a few nice trades (short term mostly) have set up.

SONC Nice Looking Long Position

I've been watching this base in SONC develop and it looks like it's in a high probability /low risk buy area.

Here are the charts as it enters stage 2 mark up-almost exactly where you want to buy.

 Here's the double bottom, the fact it didn't retest support completely is very bullish. MACD has gone into a positive divergence during the base building and recently we saw a breakout of the stage 1 base into stage 2 "Mark Up" where prices advance. The volume on the breakout was good and it also serves to set off alarms on scans that search for volume surges. Recently it's pulled back to successfully test support.

 The 3C 1-day chart is showing a huge positive leading divergence from the base and it continues.

My moving average scan screen to avoid false breakouts shows a false breakout at the 3 red boxes, RSI not crossing 50 called this a false breakout, and therefore not a buy. The green boxes fulfilled all conditions for a buy. The pullback to the 10-day yellow moving average is a perfect entry place.

Here's the 10 minute 3C chart indicating continued positive indications. This looks like a great place to buy SONC with a stop loss either under the blue 22 day moving average or several percent below the breakout level from the base. Use risk management and position sizing to keep the trade at no more then a 2% of portfolio loss if all should go wrong. The risk management article is linked at the top tight of the site.

The SPY Shows Its Hand

All of the below 1 and 5 min charts have reached leading negative divergences with 3C making the lowest low of the day in the DIA and SPY

 DIA 1 min.

 DIA 5 min

 SPY 1 min

SPY 5 min

Market Update

Well if the POMO money went anywhere, it went to the NASDAQ today. Earlier I posted an Ascending Wedge (bearish) whichI said had seen the first of several headfakes based on the computer black box pattern recognition-a prime example of technical analysis being used against you.

Here's the 5 min chart of the Q's-the 1 min chart is inline with price.

So we've seen some distribution into the last headfake back up north of the wedge (something technical analysts have been brainwashed by thousands of books to believe "this is not suppose to happen" which in turn usually causes them to declare it a failed pattern and they take the long side of the trade, only to see another reversal down. Keep in mind with a market that is hobbled with low volume, all this HFT/Black box activity not only increases orders that they take the other side of (the correct side), but they also receive volume rebates as well-they can't lose. However, at least we know that the run up is not being bought, but rather sold by smart money/HFT/Black box traders.

The DIA is in line with price with a slight leaning toward a leading negative divergence on the 1 minute and the SPY is basically showing no signals to speak of as of yet. Like I said, the action has been centered on the NASDAQ 100.

FCX

Was hammered and it deserved to be, but it looks like it's reached an oversold status, or at least someone seems to be accumulating it, perhaps to shake the tree of weak hands. In any case, I think there may be a quick long trade here.

Q's Wedge

The SPY has done nothing ZERO!  The Dow is down a bit, but the QQQQ has gained .50% or so. The Q's also formed a bearish rising wedge, a very obvious one that has seen the first of what may be several head fakes in the area. Keep an eye on this. A real move to the down side will retrace the base or should and bring the Q's back to the $51.20 area.

FX markets

Last night 3C didn't show any divergences toward EOD as I said in the wrap up, this seemingly directionless market seems to confirm 3C's bland readings. However, the EUR/USD pair as I said last night, seem to be filling out a Head and Shoulders top nicely.

 Above is a 1 min chart of the pair, the Euro just broke support of a mini head and shoulders that is part of a bigger right shoulder below.

Here's the hourly chart with a H&S pattern in the Euro and the right shoulder seems to be heading toward completion, this would mean a top in the Euro and a stronger dollar which would effect most classes of investments from gold, commodities and equities, al negatively.

Something Doesn't Add Up

Take a look at this quick article, don't forget we've had 25/26 weeks the BLS has revised their statistics.

http://www.zerohedge.com/article/bls-reports-jobs-losses-state-september-more-double-95k-loss-reported-nfp-report

POMO is over, lets see what happens, thus far AMZN which was down over 4% last night and had taken back all of yesterday's gains, is currently being bid up.

PMCS actually worked out...

Up 3.85% today, it didn't look like it would in AH last night. However RVBD seems to be the big winner, up over 15% today.

Maybe we'll take a look at a few more for EOD today.

Daily Wrap

Lets start with GLD tonight....

GLD tested the gap support and filled the gap, but closed at slightly higher support, still all in all it was down another 1.42% on increasing volume.

As you can see above GLD has broken its 22 day moving average, an average its never even tested before. Also for the first time in its up trend, RSI has dipped below 50. If you look carefully you can also see an RSI negative divergence. These indicators like RSI, Stochastics, etc are always best utilized for spotting divergences rather then overbought/oversold levels or other uses they have been renown for. MACD has been negative the last 3 days, where before it has only been negative once throughout the up trend.

On the 3C 5 min chart, I think day traders may be able to make some money long on a play in GLD tomorrow as 3C 5 min is showing a positive divergence so I'd expect a bounce in GLD Friday.

However, unless that continues and materializes over the longer charts, the 60 minute 3C chart still rules with a massive negative leading divergence.

USO also backed away from yesterday's gains and is in quite a deep pullback at this point, but again for nimble traders, there's a 5 min positive divergence there that may allow a quick buck to be made on the long side.

Given the probability of a bounce in GLD and USO I'd think I'd see weakness in UUP, not the case, the 5 min charts look good and the 15 minute is even better. Maybe we see a day of decoupling? In any case, UUP continues to suggest it's (The US dollar) forming a bottom.

However, the EUR/USD does look an awful lot like it's putting in a top, specifically a Head and Shoulders top, so to complete or begin rather the right shoulder, the Euro would need to rally-perhaps that's what we are seeing in USO/GLD. See the chart below. There's no doubt that the uptrend has ended in the FX pair, at least this leg of it.

As for the market, the short term end of day 3C charts do not suggest anything conclusive, although we should see front running early on and a late morning early afternoon rally based on a POMO day as per usual. However, strangely the Fed withdrew $1.5 Billion dollars in liquidity today through reverse repos. It's strange that they're conducting market operations to inject and now withdraw money from the economy. Perhaps this calls back to the Yellen speech about the fruit punch bowl being withdrawn in various asset classes that are forming bubbles? I really don't know and tomorrow's market operations “may” not be what traders have been conditioned to expect. It almost never fails, when it becomes obvious, it's obviously wrong. So that will be an interesting event to see if anything unusual occurs.

3C charts in longer time frames still remain negative.

As you can see, this 10 minute chart of the DIA is extremely negative looking. Yesterday's (Tuesday's) POMO rally saw little follow through, the majors ranged from +.20-+.40 on lower volume, it really can't be considered follow through. 

Half of the 10 important averages were down, half were up for an average move of -.06%

There was no real dominance in the price volume relationship today, the closest was PDVU but hardly dominant.

Goldman Sachs came out today and more or less told said the “TRADE” is front running POMO. Now does anyone really believe that GS is this late to the party? Or, perhaps are they setting up their own little game?

In after hours, AMZN gave back it's hefty 4% gain, this has been a Wall Street darling so it'll be interesting to see what it does tomorrow. I said earlier today in the earnings trades that AMZN was bought yesterday for the gap up today and today it was sold, telling me that if the earnings were to be good, why sell it, why not just hold at the lower cost basis and collect further gains? Here's the chart...

Another big mover in after hours was LEG, my hypothesis was wrong, but 3C was right about bad earnings. This is the kind of stuff that tells me there are leaks all over this market, it's just finding them and capitalizing on them. I think LEG ended the AH session down about 9%. Here's the chart...

Look at the obvious selling at the top. With all of the insider selling we've been documenting week after week, I'm wondering if we won't see a lot more like this.

Lastly I mentioned a short on BAC t. Take a look.

 BAC's hammer yesterday may have put in a temporary bottom/support

 Here is today's intraday action, note that it did not rally toward the end of the day and gave up early gains fast, but don't assume that's all bad...


 Looking at 3C, you can see the distribution you can see that it was sold right off the opening, but it also showed signs of accumulation. A steady lateral trend is a typical sign of accumulation that's why I said don't assume it's bad. They may have been buying for a bounce within a narrow ranged order.

 As you can see, the trend channel has captured some big swings, so if it bounces, all the better. You can build the position a little at a time and add the majority when it reverses. The red box would be the current stop for risk management planning and position sizing.

 The big picture of the 3C daily chart shows bounce or not, this one is seeing severe distribution with a leading negative divergence on a daily chart! The top is also clear.

To get a feel for the forest, you can see BAC still has a lot of downside and shorting an equity rather then buying an inverse ETF like FAZ will allow you to pyramid the position, something you can't do in a long, not even an inverse long. This means you CAN make more then 100% on a short, there's an article under "Resources and Concepts" at www.Trade-Guild.net that explains the procedure. I'd take a serious look at this one, this seems to be shaping up for an excellent entry and a probable trend with minimal risk as long as you follow risk management and position sizing which can always be found with the links at the top right of the site.