VIX Plunges

 VIX 3C positive divergence, last time there was a positive divergence (much smaller ) was April of this year at the market's peak followed by a decline and flash crash.

Today's lows have almost taken out the April lows, if that happens you have to go back to 2007 to see lower lows, of course that was the major top of the bull market and start of the bear market.

Here's the April VIX lows vs. the SPY in red, note the lows correspond with the April equities crash.

Range Broken, uptrend too?

 DIA 1 min

 DIA 5 min

 QQQQ 5 min

 SPY 1 min

SPY 5 min

It loks like the breakout of the trading range is about to itself, reverse course to the downside.

Noon Update

There's not much going on at all here, the only divergences showing up short term are a small negative on the 1 min chart of the Q's, a possible SPY divergence, although it hasn't strengthened enough to even warrant a screengrab and DIA with a slight negative bias. . Other the that, there's just a trading range. I'd expect to see that range hold for awhile until we see something more definitive.

Yesterday's Strategic -Tactical posts seem pretty well timed this morning, it's always hard to trade against the prevailing price, but when you have conviction of the trade it gives you much better positioning. As you know the exit is only one part of making a gain, the entry is just as important and I think maybe the harder part.

FXP mentioned numerous times, but latest was Wednesday and yesterday, looks like it may be in good position as the expectations of a Chinese rate hike are building. Right now FXP is just starting to breakout. Yesterday would have been a decent area to buy as well on a bit of weakness.

Keep your alerts set for BAC, a decent entry would be below $12.38 with a stop above $12.78. You could phase into the position and add as it takes out the next major support around $12.25 and then $12

I still like SRS, especially on a pullback so long as it holds $19, which I believe it will.

A Grocer that I recently highlighted, RDK as a short will be worth a serious look below support at $37.50-remember they have tight margins that are being squeezed and inflation in food is up substantially.

TGT will also be worth a look as a short below support at $58.40

Pinning the Calls

As I mentioned in the last post, today is options expiration day and it's typical for higher open interest contracts (calls) to be pinned. The highest open interest SPY calls are at $125 - 131,815 contracts. I'd expect those calls to be pinned and expire worthless.

From last night's trade ideas, RURL which is a trade on or toward the close has met the first condition of a reversal I was looking for by opening higher, gapping up. Now it needs to just close below $14.20, the further down the better.

SNY is acting well for the short trade, continuing to break that flag I showed you last night.

AZN already lost nearly 6% , it's a bit tough to enter, but if it closes below (46.60-support) it may see follow through downside so I still like this trade, only wish it was a day earlier.

The FBP long is holding its own this morning considering the broader market.

JSDA is also holding its own thus far, up in a down market.

Interesting Open

The House voted to extend the Bush tax cuts, notably for investors the Capital Gains rate will remain at 15%, rather then revert back to 20% which would have caused investors to take profits before year end and likely today to avoid a higher tax rate.

Yet it's not the news, but how the market reacts. We also had positive earnings from  ORCL and RIMM and US Housing Starts rose in November breaking a 3 month trend.

The market's reaction? It could be a bit of "buy the rumor, sell the news", but the reaction on the open, (keep in mind today is triple witching options expiration)-not good.

The only thing I see as a negative driver is the recent turn around in the Euro which was covered yesterday via FXE/UUP.

Here's what the 5 min chart looks like.

By the way, ALXA just triggered a long.

TRADES

Today's dominant Price/Volume relationship was the most bearish, close up/ volume down.

Earlier today TICK volume hit -1500 which doesn't happen too often, yet we saw a marginally higher close. 

As of now, and as I showed you earlier today, the Euro is moving up, FXE had positive divergences which makes sense with the continued move up in the euro after the market close. Should it continue higher, we should see a gap up in the a.m. and some early strength, what happens next will be hard to say, but the Price/Volume reading wasn't one to get excited about as a bull. 

Below are some trades to take a look at.

RURL Short- watch for a gap up in the morning and a close down, at tht point it is worth a shot on the short side with a stop @ $14.95

The last 3 days have seen diminished momentum on high volume, or churning/distribution with today forming a shooting star reversal candle.

The chart above shows the same thing, distribution over the last 3 days. This is more of a swing trade, but possibly a parabolic move for quick, decent size gains.

MGLN- Short sale on a move below $46.29 with a stop at $47.15

The bear flag is seeing distribution and should break soon.

SNY-short

The 200 day moving average has been very important support/resistance

The 60 min chart has shown distribution at the breaking points of the 200 day.

The 1 min chart seems like SNY is ready to rollover, exhausted by the fights at the 200 day m.a.

AZN-short

AZN has seen resistance and support off the 50 day, now it will act as resistance .

3C seems to confirm the distribution heading into resistance.

FBP is a speculative long play

As you can see, it's giving a long signal.

3C shows accumulation in a long formed base.

The 5 min chart shows what looks to be a stock ready to go into stage 2 markup with continued gains, there's a good chance this one could move up quite a bit and for awhile considering the size of the base.

JSDA is a speculative long

As you can see, JSDA has held the 200 m.a. for 4 months which makes for a fairly low risk entry.

The 10 min chart looks like it's bracing for a move up.

The 1 min chart looks like the market makers are stocking up for a move as well.