Daily Wrap

Today was an interesting day from a 3C perspective, usually we see markets moving together and 3C readings are similar, but from the sector rotation chart I put up, it was clear that Tech was dominating the day. Tech also as well as the QQQ's were showing the heaviest distribution since the cycle up started.

This was an interesting thing to watch in 3C, it shows what I often talk about, Wall Street using strength to distribute into. They need the demand to distribute positions as large as they are trading and today Tech gave it to them.

It was unique to see this, but it's also somewhat unique to have only 2 of 10 sectors dominate the market (Industrials and Tech), so I/we got to see something a bit new and it gives us some insight into the highest probabilities for tomorrow.

 The QQQ15 min chart in heavy distribution, most of it coming today.

 Looking at a sort of MACD for 3C, you can see this was some of the heaviest distribution in the Q's since this consolidation started.

 In Contrast, the financial heavy S&P-500/SPY isn't nearly as far along in to distribution as the QQQ.

 The SPY's 3C depth readings are still pretty much what I would expect.

 XLF-Financials showing they haven't seen serious distribution yet.

 And the 3C depth is still quite shallow.

 XLK-Technology shows heavy distribution of Wall Street's long position and again, most of it coming today.

The 3C depth for Tech is pretty much near new lows, so I'm very happy with the call today to let go of long positions in Tech.

I believe from what the charts show, financials will come in to rotation tomorrow and we'll see them distributed as Tech was today, that should just about wrap up this move up.

I'm still expecting one more move down, possibly breaking the August low, so we should have a good chance to get short for this move. My model portfolio's return for September is 60.96%, in a choppy market, so this strategy is clearly working well, using leveraged ETFs as 3C times the reversals.

It appears the SPY will be pinned around $120 Friday, so we may have some opportunities to go short as early as tomorrow in certain sectors. Now that the Q's 15 min chart has turned, we are nearing the end of this cycle, which I said before it started on Friday and at the lows of Monday, would be a short cycle of several days, then a day or two for the reversal, so the amount of accumulation we saw was predictive in the length of the cycle rally.

At this point, I still think we will get a longer lasting and more severe short squeeze rally, but I do think the market will put n new lows before that happens.

I was reading a website tonight that was upset that credit was showing a deteriorating economic situation, but the markets weren't reflecting credit. This is where I think to myself, "It's because you don't understand that Wall Street sets up and Controls the game" 3C shows us this and doing 60% in 2 weeks in a portfolio with no options that I scarcely have time to trade, is a pretty good testament to that fact.

Those who don't understand the markets are always looking for a reason it did or didn't do something, not understanding that this was all mapped out way in advance and those that do know, make sure they tell you something as to why the markets did what they did, they sure aren't going to come out and tell you how the markets really work.

The fact is, the markets are rigged, they are crooked, they are full of leaked information and insider trading as well as front running. Nearly everything you see is a deception of some kind. If we get that big upside rally I think we will get, the daily bear flag on the charts that has sent short interest to nearly 3 year highs, will burn heaps of short sellers. And that's what the market is, no different then a slaughter house production line.

In short, look for Financials to step up tomorrow. BAC may be one trade worth considering for those of you who can day trade.