I've spent most of the night backtesting trading systems, mostly based on volatility, 3C and a long stochastics. Results in the past are pretty good, results over the last 6 months are not as good, mostly due to the choppiness of the markets. Very short term trades recently have tested the best, at least the highest percentage of winners, but the percentage gains have been hardly worth the risk.
In any case, in poking around the market, the one thing that stood out today, was the exact opposite of what stood out Tuesday night-the Price/Volume relationship. I know it's not a fancy indicator and most people probably don't even understand or are aware of the 4 potential relationships. What stood out Tuesday night was Price Down and Volume Up by a 2:1 margin over the second place pairing. In essence this was a short term oversold reading. This was 1 of 3 things I mentioned on Tuesday that lifted the possibility of a bounce which of course we have seen.
Tonight's dominant relationship is the believe it or not, most bearish relationship-Price UP (yes it's still the most bearish of the 4) and Volume Down. The dominance was even stronger then Tuesday night's with averages like the Russell 2000 coming in nearly at a 3:1 dominance over the next relationship which was as you'd expect Price up/ Volume Up which by the way is the most bullish relationship, but not when the first is seen in between a 2:1-3:1 ratio over the second. This indicates traders backing away from chasing higher prices.
Of course this is still a very fundamental market or news driven and the employment report at 8:30 will take center stage. Remember with news, it is never the news that matters, but how the market react to the news.
Thursday, December 2, 2010
Charts Request
Because the Dow is the only average that includes custom indicator intraday data, I included it.
DIA 1
DIA 5
DIA 15
DJ-30 1
DJ-30 5
Dj-30 15
QQQQ 1
QQQQ 5
QQQQ 15
SPY 1
SPY 5
SPY 15
SPY daily
Dollar Chart Request
I have to use UUP as usual because the dollar index does not have intraday charts.
Dollar divergences 10 min chart.
The dollar was extremely overbought so a correction is not very surprising.
I was asked earlier in an email about it, I answered I'm not too concerned as long as it holds around the 10-day m.a.
The yellow line is the 10-day m.a. This is the screen I use to avoid false m.a. whipsaws, with 3-4 components all having to be positive, all 4 are still positive.
The dollar was extremely overbought so a correction is not very surprising.
I was asked earlier in an email about it, I answered I'm not too concerned as long as it holds around the 10-day m.a.
That didn't take long
I just posted the channels and mentioned the possibility of black box manipulation. The initial signs look like a false breakout.
Rangebound
My first update this morning I said to watch for a "Trading Range" to develop, we have it. We also have the black box systems still active, they'll easily see the range so there's a high likelihood of a few tricks around support and resistance, volume spikes on breaks of either will confirm the black boxes are getting their way, but ultimately these ranges will be important to watch as they develop.
PMs Chart Request
Charts longer then 10 minutes are not inferring anything as of yet.
Market Darlings Being Taken Down?
I just read how NFLX's CEO just sold another 100,000 shares and only owns 51,563 shares. I decided to take a look at a few other market POMO darlings just out of curiosity.
AAPL 1 min up +.06% today
NFLX 15 min down -2.92% today
PCLN 60 min -.65% today
None are performing with the market and have not been the last few days either.
None are performing with the market and have not been the last few days either.
A Different Metric
Looking at ETF's in different categories, the charts below compare the long/bull to the short/bear underlying action.
FXI CHINA 25 Long
FXP CHINA 25 UltraShort
QID QQQQ Ultrashort
QLD QQQQ Ultralong
TWM Russell 2000 Ultrashort
UWM Russell 2000 Ultralong
QLD QQQQ Ultralong
It 's a little early for an update
as morning trade is not the most reliable indication, at least until it settles in, but here are the charts right now...
DIA 1 min leading negative
QQQQ 1 min close to a leading negative, but negative
SPY 1 min
As you can see the early divergences have already halted the upside trend, it will take a little longer for a trend to settle in. I'd look for a trading range first.
As you can see the early divergences have already halted the upside trend, it will take a little longer for a trend to settle in. I'd look for a trading range first.
