As Many As I Could Squeeze In

 DIA 5 min neg.

 DXD short on the DIA 5 min positive


 QID short on the QQQQ positive 5 min

 QQQQ 5 min negative

 SPXU short on the SPY positive 5 min

SPY 5 min negative

 IWM 5 min negative

TWM short on the Russell (IWM) 5 min positive 5 min

 EDZ short on emerging markets positive 5 min in a leading divergence

EDM long Emerging markets negative 5 min

 FAZ short financials positive leading divergence 5 min

 XLF financials long 5 min negative divergence

Looking at the 5 min charts of the long sectors vs the 5 min charts of the equivalent shorts on those sectors, we have negative divergences in the longs and positive divergences on the short. I covered as many as I have time to. That is a perfect 12 for 12 all alluding to the same thing.

USO

 The USO 1 min chart has shown improvement

While the 5 min chart does have a negative divergence, it's not nearly as bad as some we see above and may improve with the 1 min chart improving.

Here's the FX EUR/USD, as I mentioned earlier most of the early going today we were in a bounce (green arrow), I mentioned the start of a reversal several hours ago and you can see that at the red arrow. The red trendline represents new lows for the Euro.

2/3 Leading Negative Divergences

These are all 5 min chart, DIA , QQQQ  and SPY, only the SPY is not in a leading negative divergence. 

USO Update

 Here's the break of the LN channel I mentioned earlier and talked about last night

 This is a close up, if the rally to kiss the channel fails, USO should head lower into the close or at least for the next leg.

Here's the 5 min 3C chart

To me it looks like locals took their profits and retail is left trying to hold the trade up, at least on a short term basis.

Emerging Markets

 EDZ 1 min positive divergence

 EDZ 5 min positive-I'd like to see a leading positive divergence above the white trend line to match up with what we see below

 Emerging Markets long EEM 1 min leading negative divergence

5 min leading negative divergence

As I mentioned earlier, to me it looks like the locals are selling risk into higher prices and the long weekend.

Possibility

Here's a quick exchange with a member

"Jack said...

Brandt, I think that we may need to consider that an increase in military actions around the globe may start to play into this. It also seems that commodities might be starting to break in general from the dollar trade. Look how metals and other have remained stable even with pressure from a stronger dollar.

November 24, 2010 1:10 PM 

Brandt said...

This is true, I mentioned agricultural commodities seem to be on their own as well.

November 24, 2010 1:22 PM "

Afternoon Update

 DIA 1

 DIA 5

 QQQQ 1m

 QQQQ 5m

 SPY 1m

SPY 5m-similar to what we saw in USO

USO Linear Regression

USO is an interesting trade, it showed accumulation, it broke out. The longer term charts of USO all seem bullish for a decent size bounce. I have a little trouble reconsiling the strength in the dollar that is likely to contnue (remember the Bush era, a weak dollar policy is what pushed crude to those trend highs), now we are in an environment where, despite the Fed's actions, global events are dictating dollar strength, this is at odds with rising oil, which is at odds with the charts that have so far been effective. Unless some one has a really good fundamental reason that oil should surge that may be more prominent then the dollar correlation, this makes me a little nervous. In any case, a linear regression channel is a great way to objectively look at price action. I've set one up below with the settings if you want to copy it for yourself. You can always use www.FreeStockCharts.com for realtime data (no 20 min exchange delay).

The channel may need some adjustment as the trend progresses, but using linear regression, just as drawing trendlines, be sure to use objective settings, our subconscious easily creeps in to move a line slightly in a hopeful spirit, but it is doing a disservice to you.

The other interesting things on the ONE MINUTE chart (lets keep that in mind, trends that last days or weeks will see plenty of intraday pullbacks-you can apply the same LN channel to longer range charts. Getting back to my point, MACD and volume are both fading into the trend which is not a strong sign. I'd watch for a break of the bottom of the channel at the red box for short term traders.

For the USO Traders

The rest of the charts posted below have not changed, the one minute has. a bit, so this may lead to an intraday pullback. It may because of the very recent change in trend in the dollar.

The Dollar Relation

 The SPY vs the US Dollar Index Daily

Hourly UUP vs SPY

This is hardly a scientific comparison, but it's obvious there is a directional relationship, but not to the depth that we'd expect, everyone has noticed this.

So either the correlation is falling apart (it's hard to say with out actually knowing the traditional ratio), but eyeballing it, something is certainly off. Either the relationship has degraded or as I think may be the case, the forced market manipulation that occurred around the red arrow on the top chart due to POMO moving the markets higher, may have skewed the relationship. The scary part is that POMO is not having the same effect anymore and if there's some sort of arbitrage play or a return to the normal, it could force a nasty drop. That's just me thinking out loud, but it makes some sense.

By the way, the Euro that was in a 6 hour plus bounce vs the dollar has made a lower high and lower low for the first time in this bounce, suggesting the trend is changing which would normally have an inverse relationship and drag the market down. I think it's possible we see strength today in price as institutions unload positions for the long weekend in a world of unusually high uncertainty.

Chart Request and maybe a hint..

 AAPL daily-this is the chart I'm concerned with on AAPL, it certainly looks like topping action

 The 1 min chart is showing a negative divergence, however, gains may continue for a bit as I'll explain

AAPL 5 min shows a slight positive divergence late yesterday-same as SMH

 The hourly AAPL chart has spread to the daily and looks pretty bad

Here's the same late accumulation in SMH yesterday, not huge though.

 FCFS in financials shows the same 1 min positive divergence yesterday, now in a negative relative dvergence

 The 5 min is also in a negative divergence. If you look at the white square, that is the price range where accumulation took place, so the accumulators are at a profit and I'm inclined to think the negative divergence today was them selling into higher prices.

 The 15 min shows the downside reversal and again, a rather short period of accumulation. We also see a positive leading divergence right now, but the shorter term charts will effect this if they stay negative.

 FCFS daily shows no confirmation the last month or so, thus a negative divergence. Remember that tops are rarely an event, they are a process. This is not as developed as AAPL's, but it also doesn't have the same large float.

 FCFS 1 hour still implies about 2 days of accumulation at the lows, so they are in profit now.

In financials, here is XLF with a late day positive divergence and now a negative today.

I'm thinking that it may be the case that because we have an extended holiday, effectively 5 days as most traders won't be in on Friday and US markets are closed tomorrow. They maybe taking a quick profit on these trades. With the volatility around the world, which is a post I'm working on, I'm not sure how many traders will feel comfortable holding a long position for effectively 5 days when the news is so bad and fast, especially with the Korean Peninsula.

USO Update

The USO 60 / 15 min charts are looking very healthy now, the 5 is in confirmation with the trade.