Quid Pro Quo

The nature of smart money revealed. Several times PIMCO has said a few things that raised eyebrows, basically causing suspicion they knew the Fed's moves before they were announced-that's smart money for you.

We had negative divergences in GLD before it broke it's uptrend, later that week it was confirmed that PIMCO was selling.

Guess who a Fed adviser was?

Quoted from the article below, " Pacific Investment Management Co. (PIMCO) and BlackRock Inc. weren’t only advisers to the Fed, they were also trading securities they helped value, the Fed data show."


Full Article


Ron Paul is going to have some serious questions for Bernanke 

The Story Gets More Intensive Toward End of Day

This is something I've mentioned in several of my analysis of the eurozone, complete failure or something very different then what we observe now.

Angela Merkel Threatened to Walk Away

As I have repeated several times, we could be one headline from a major upheaval as the market whistles past the graveyard.

Late day Ramp Job

At the end of the day today, as I mentioned, there were no 3C positive divergences to suggest a move higher like that, but there was a volume pump which is usually a tell-tale sign of retail chasing prices higher, Institutions don't chase, they're in early before anyone knows what' going on. However, real or not, there was a leak that Bernanke will announce the possibility of more QE on a Sunday morning talk show.

Rumor or fact, we'll find out soon however Bernanke may have trouble with such an idea with new voting members coming into rotation in the Fed in 2011 that openly oppose this QE, ad then there's the Republicans that would like to strip the Fed of a lot of it's powers, or rather... mandate. They'll have Bernanke on the hot seat ASAP.

I personally don't believe the path of least resistance would include more QE.

Here's the article

Don't have time to get all the charts put up,

However there are no short term positive divergeces leading to this EOD pump, it's purely an open volume play.

EUR and USD

These are really for practical terms 2 separate studies. The dollar index, if I'm not mistaken has the heaviest weighting with the Euro/USD pair, I believe it's about 50% of the Dollar index, so these two tend to be the most closely correlated of the FX pairs in the Dollar Index.

First, here is the Euro ETF.

 The Ascending Wedge (bearish) showed all kinds of problems, other then the wedge itself. My MACD (which is a long setting so don't look for it to match up to the standard settings) showed and continues to show the weakness in the trend. The white line in the pattern implied target.  These wedges are the patterns I've seen the most of lately, at least the most  succesful pattern.

 This is the 3C chart (Daily) -note the negative divergence near the apex.

Here's a screen you've probably seen more then once, I use it for confirming m.a. trades to eliminate most of the false signals. You may remember that 3 things have to happen, the moving averages need to cross in the price window, the middle window has a custom indicator in yellow that must cross its moving average and RSI needs to cross the 50 level. I usually use a longer RSI as well-typically 22, depending on the type of security and type of trade. You can see the successful crossover that lead to the upside and the successful crossover to the downside. Usually after a move, depending on how much momentum there is, the first pullback is to the 10 day moving average in yellow as you can see happened in mid November, the second pullback is almost always deeper, the 22 day is most often the target of the second pullback-(blue), you can see the FXE is between the two now so it may have more upside on this chart.

 FXE 1 minute is showing signs of a loss of momentum.

 The Euro has good support at 1.30, a break of $1.30 wouldn't be good for the Euro. Note the 1 day accumulation on 11/30 as the Euro hit $1.30 for a bounce. The 10 min chart just today started showing some signs of weakness as it stopped making higher highs. It's a light divergence, but may be a precursor.

The 15 min chart also shows the same 1 day accumulation at support. As smart money usually does, they accumulated at lows and sell into highs. The volume surge is a mini version of stage 2 mark up. Note this chart is also showing a loss of 3C momentum.


UUP-Proxy for the Dollar

 UUP in a Descending wedge (bullish and the opposite of the ascending wedge above). You can also see 3C daily accumulation in the dollar at the lows and before it broke out of the wedge to the upside in a reversal.

Here's the same screen as above, in purple is a false crossover, in white is a real crossover. The first red square is the pullback to the 10-day moving average as typical, the second red square is where UUP is now, as I said, most often the second pullback is near or at the 22 day moving average, sometimes a little less, sometimes a little more, but it appears this is a pullback and the uptrend us still intact.

 5 min 3C showing strength

The 15 min showing the opposite of what was seen in FXE, a negative divergence at the top, where the dollar was pretty extended, under these circumstances, a pullback can not be said to be bearish, just normal. Note the strength in the 15 min 3C chart.

Update 3 USO

Sorry about all the posts, I'm still playing catch up. I'll get to your emails if I haven't already, I'm trying to do that in between updates.

 USO 1 min  intraday reversal

 USO 5 min negative relative divergence

USO 10-min and this is the key to the longer term direction. It is currently in line, but if the 1-5 min charts continue to deteriorate, and/or the Euro resumes it's slide, we should see movement in the 10 min chart.

Oil is traded in US dollars and as the value of the dollar drops, oil's price is adjusted accordingly to make up for it. The ECB meeting lifted the Euro, however whether it's a bounce (as problems , although quiet lately still remain) off the important $1.30 level which is important support, or whether it's something more significant is the question. I'll be looking at the USD and the Euro and post that soon.

UPdate

 DIA 1

 QQQQ 1 min

 SPY 1 min

SPY daily for those interested

Update Finally

Sorry for the late update, I lost my internet connection just after the open. Here's the 1-5 min charts on the averages.

 DIA 1 min
 DIA 5 min

 QQQQ 1 min

 QQQQ 5 min

 SPY 5 min

SPY 1 min

ADP Report

A few years ago ADP started sending their report to me, I have no idea why, I guess because of the Trade Guild  website, but in this weeks ADP number I mentioned their rarely on the mark, they just proved that once again as Pay Rolls came in at a bigger then big MISS.