LVS and PCLN

Last night I wrote a little about both of these May 3rd shorts that have been performing pretty well. The price action this morning is pretty predictable thus far and that's why I warned about these two last night. Don't misunderstand, I still like both shorts, it's just that we have all kinds of different traders here, some don't mind riding out drawdown, some would rather trade around any adverse move.

 LVS approaching the support level I mentioned last night...

 Yesterday we didn't have much to work with on 3C, there was a hint of 1 positive divergence, however this morning a couple of positive divergences have developed.

 Even as such, keep an eye out for a move (likely a brief move) below the support line. It's been a long time since stocks held support "exactly", it used to be that way 6-7 years ago, but Wall Street has long since figured out the game and plays it well.

 Here's PCLN after that nice day down yesterday it's tangled up in the support zone.

 This is the kind of action more typical of the current market, the support zone is probed below and above several times shaking traders out.

Yesterday the yellow box is all we had to go on yesterday, a slight leading divergence. This morning we have a little more in the way of positive divergences right at the 10 a.m. low, an area where they'd be able to pick up stopped out long shares. This is still very early, I probably wouldn't make any decisions yet, but the tone of trade in these two is definitely now become something we want to watch.

Back to the prop traders I'm listening to in the background... all I can say is, "Oh My". I can't imagine guys who watch the market all day long, every day are still preaching TA crap that hasn't worked for 5 or 6 years and especially the last two years. I've now heard them enter and stop out of about 6 trades on the SPY this morning alone. However if you think about the nature of prop trading, they really don't care what these traders make, whether they survive or not, it's all about commissions and order flows/volume rebates. There's absolutely ZERO forward looking analysis, everything is chasing, chasing, chasing and by the time they start chasing, the move they chased is over!

It's certainly enlightening though and a bit entertaining!