FEBRUARY TRADE LIST IS UP

There's a lot of trades put out the last few days, I've put 20 trades on the list, some are linked to the original post if you want to see the concept. Be sure to read the notes. Several of the trades are in play now, none are too far gone that they can't still be entered. I have a lot more to add to the list, I'll be adding those that were mentioned today and tomorrow I'll be featuring some new ideas. By the end of the day they should all be on the list.

If you are in an older trade from December or January and want updated situation reports or updated stops, let me know and I'll get them on the list as well.

As always, any questions, please email me. Be sure to use risk management. If you don't have a solid risk management plan, I'm here anytime to discuss ideas that might work for you or share my trend channel with you. All trades are for mental execution whenever possible, I don't like showing the middlemen my card ever, especially with stops. All stops are end of day unless otherwise noted.

See you in the am. !!

Market Close

You probably heard the good news, the Fed is finally being hauled in front of Congress by the man who wrote the book, "End the Fed". It's a nice thought any way.

The dominant price volume relationship today was price down/volume down which doesn't tell us much, it doesn't put the market into overbought or oversold territory. It's unclear right now what effect the Treasuries' SFP program will have as speculation is that as of tomorrow the Primary Dealers will have $25 billion dollars and a total of some $195 billion when all said and done over a period of two months, to invest in risk assets-read as the stock market.  We'll see, there's also another POMO, I'm not sure of the size, the last two days have been rather small.

As for the charts, take a look, they all look pretty similar although there are some differences among the averages. I had to use ETFs for many because for some reason I'm not getting today's daily volume on the index itself except for the Dow.

First I want to start with the DIA's 3C chart, most of the averages look the same as this so I'm not going to be redundant.

 The 1 min chart toward the end of the day showed a positive divergence so there's a good probability (world events excluded) that we'll see at least early strength in the a.m.

 The 5 min chart doesn't look so hot, note the lateral movement in the DIA, if there were accumulation I'd expect to see some price moves to the upside, right now it seems as if positions were offloaded in a somewhat mild manner.

 The 10 min chart which is more significant (the longer the chart, the more significant the implications of a divergence) shows much the same. In a normal market without POMO levitation and other games, this would lead to downside.

 You can see the 15 min chart on 1/27-1/28 had a similar negative divergence that led to downside.

 The 30 min chart is just a bit negative of confirmation so that's about as far as this leg of the divergence has travelled. As stated above, a 15 min chart like that would normally lead to a swing down.

 The actual Dow Jones 30 is .01% higher today on significantly lower volume. The closing candle today (a Doji) is indecision and indecision often means the prevailing sentiment has lost its momentum leaving the door open for a reversal. See the day before the meltdown last Friday-the same Doji candle.

 The IWM representing the Russell 2000 is not confirming the Dow for anyone interested in Dow Theory and it has a couple of different features. First the candlestick formation formed over the last two days is a Japanese Candlestick pattern called a Harami, meaning in Japanese, "Mother with baby" as today's candle in inside yesterday's real body. In the west we'd call this an inside day and this is also a reversal signal. The fact today had a long upper wick makes it look like a bearish shooting star candle, although it does not have the gap needed for the actual title. In any case, it shows higher prices were rejected and carries a bearish bent. Furthermore the Russell broke out to a new high yesterday for this leg up, this normally would have the bulls buying the breakout. The move down below that breakout today puts the bulls at a slight loss, the bigger the move down, the more likely the bulls would sell the positions at a loss. Today's drop was not that significant in this case, however the candlestick patterns are still significant.

 The QQQQ shows two Haramis, a bullish one in the red box which led to an upside reversal and the more recent bearish one in the white box above the white arrow.

The SPY didn't cross below the breakout level yesterday that bulls would have bought, although it did close lower and a bit off yesterday's highs, some bulls can be a a marginal loss. Again we see two Harami patterns consecutively. Whether today's leads to a downside reversal tomorrow is unknown. 3C is showing charts that reflect distribution, bulls were not eager today to chase prices higher, but we do have the SFP wind down tomorrow and that money possibly entering the market so we are dealing with a new unknown. For the time being, it's still about the right trades at the right place.

I'm putting together the February trade list, there's lots of possibilities that have been mentioned and I want to get them in one place. I've also decided to create a separate list for Cats and Dogs trades and their limit triggers that you can look through. I've not wanted to add that number of trades to the list as it may be confusing, although I also want you to have the ability to get into these trades before they pop, rather then me alert you when they do pop and you having to act quickly on a decision so look for the February Trade List and the "Speculative Trades".

I'll likely add another update tonight. If anyone has trouble with all of the updates crowding your email, contact me and if you like, you can provide an alternative email address, I noticed today there were nearly 20 updates-I don't want you turning me in as a spammer :)

Follow Up on MUB Trade entry

MUB was covered on January 26th, we were looking for an entry off the correction.

 Here's the long term down trend on a daily chart in MUB-(ETF for national municipal bonds)

 A closer look, this is the correction we were waiting for to end to enter a short position. The top red line can be used as a stop and the bottom red line can be used as an entry as a limit order (in your head).

 30 min 3C chart.

The trend channel is showing about the same stop-it has carried the entire downtrend.

Market Update

Last update I said I thought that we'd see breakouts in all of the averages before there's any downside. We have some downside on volume in some of the ETFs. 3C is also looking like it's supporting downside, we'll see shortly.

Be sure to check out last night's bond trades

TMV long and TLT short. Both are on the edge of a break.

TRADE ALERT!! PLUG LONG

Take a look at PLUG, it may be breaking out now.

 A nice looking triangle consolidation, with volume confirming. today's volume just started picking up here.

 15 min 3C chart looking positive.

60 min Heiken Ashi chart with a volatility squeeze and volume picking up.

Remember, at this price, this is very speculative. Check earnings as well.

Updated Trade Alert...

SBCF was featured a few days ago, it's still looking pretty god to me.

 This is a nice looking rounding-type bottom, 3C daily looks very bullish. It's broken out and is in a triangle consolidation, which is usually taken as a continuation pattern. Because this is a Cats and Dogs trade, I think manipulation of the pattern is very unlikely.

 The 15 min 3C chart shows a rare positive divergence, as technical indicators typically get a little whacky inside consolidations or tight ranges.

 Here's a Trend Channel stop just below 41.60 so there's less then $.10 of risk per share (of course we can't account for surprise downside gaps). In any case, the set up and the risk profile both look very good.

MACD is very positive and volume looks right for a consolidation. All in all, this is a pretty choice looking chart. However, remember the low price of this stock and relatively low volume makes this a speculative trade and risk management, as always should be in place.

**Make sure to check the earnings date, I believe it to be late this week.

ABT Trade Alert

This is a pretty decent Risk:reward area to enter this trade long.

 The daily chart shows what looks like short term capitulation. Yesterday formed a Harami reversal candlestick pattern and today has confirmed it.

 Almost every 3C timeframe looks bullish, this is the 15 min chart with a positive leading divergence.

The idea here is a swing type trade entry. The entry is above the higher of the two trendlines, or in this area. The stop would be a few % below yesterday's lows around $45.08, maybe $44.90 or so. If this breaks out above $46.60, it will have taken out a significant resistance zone which would be quite bullish.

Checkout FBP-it looks like it's starting a leg up.

Trade Alert ORLY Short

Not only does ORLY look bad, but the sub-industry and the majority of its components look bad as well. The industry has a lot to do with the stock's daily movements as does the market of course. However, in choosing a candidate, I liked this one the most as it seems to have the least amount of manipulation, it's kind of the sort of trade we used to see several years ago before HFTs and Black Box systems plus Fed intervention gave us this crazy volatile market we have now. So take a look, I'm sure you'll find it interesting.

 Here's a linear regression channel in blue (click on the chart for an expanded view) which has held the entire leg move up. The breakdown is sharp and looks very clean.

 A closer look at the daily chart, note the bear flag at the red arrows, it broke just like a bear flag should, no black box pattern manipulation. The recent consolidation is being tested today at support. A few cents below and the next leg down should begin.

 The daily 3C chart has been bearish on this chart as you see distribution into the December top and right now 3C is in perfect confirmation.

 A slight caution that there may be a bounce at support as you see a slight positive 3C divergence on the 5 min chart, still, I like this and may consider this a trade to phase into starting here.


 The original version of the Trend Channel held the entire uptrend right until the end of the arrow. It has also held the downtrend thus far and puts a current stop at $57.92. Once there's a break and some downside momentum, the trend channel will catch up fairly quickly and narrow the stop.

Looking at a Heiken-Ashi price chart with Bollinger Bands, you can see today's negative candle, as well as in traditional candlestick charting, but more importantly is the volatility squeeze in the bands which implies a highly directional move is about to occur. Volume at Price looks like I'd expect .

If you have any questions about this trade, feel free to email me.

The Other Averges

 DIA 1 min-again no volume on the breakout here.

 DIA 5 min 3C

 IWM (Russell 2000 ETF) 1 min.

 IWM 1 min 3C-a positive divergence, no breakout yet.

 IWM 10-min


 QQQQ 1 min triangle


A positive 1 min divergence in the Q's, no breakout yet.

I'd expect is this is a false move, all the averages will breakout before any downside movement.

Market Update

Here's the key intraday pattern to keep an eye on..

 This is the intraday triangle that has developed. Remember that these very obvious patterns are very often manipulated with false moved. Thus far we do have an upside breakout of the triangle, but little in the way of volume confirmation.

 Looking at the 1 min 3C chart (which is often the middle men of the market-market makers-specialists, etc accumulating/distributing intraday moves) there was obvious support to move this to a break out. the effect would be to pull in bullish traders on the breakout, whether it holds or not remains to be seen.

Here's the more important 5 min chart showing a pretty unambiguous negative divergence between price and 3C.

So once again, the question of whether that breakout holds or reverses and breaks down is the predominant feature of today's intraday trade.

UUP/FXE UPDATE

Very quickly, the newest developments, the armed protesters have been on horseback and camel. A few were taken down by peaceful, anti-Mubarak protesters and their I.D.s were grabbed and showed to TV crews, they are apparently police. They are also threatening to burn down the square with anti-Mubarak protesters still surronded. The army that is present has done nothing except use water cannons sporadically and they are telling the protesters to leave the square which would put them directly in harms way with the pro-Mubarak armed protesters. It seems this may be a "regime" coordinated effort as the military is doing little. Remember, their military regime is in danger as long as protests against Mubarak are active. So I suppose this could be "Plan B".

To the currencies.

It seems contagion fears are starting up once again in the Euro-zone. I'm not sure what today's catalyst is, except I believe I saw a headline about German opposition to bond buying, I'll have to look around, but the euro is reacting.

 This is a chart of the EUR/USD on a 5 min scale. You can see the Euro is reacting to something, thus the dollar is gaining.

 UUP which broke obvious support yesterday (which in my thoughts was questionable as a potential false breakdown as we often see this at important levels and before reversals as a sort of bear trap) has put in something of a candlestick pattern called a tweezer bottom with nearly identical lows, it also as of now is forming a Harami reversal pattern or what we call in the U.S. "an inside day"-this is a bullish reversal pattern so this may very well have been a false breakdown/shakeout/bear trap.

 UUP 3c 1 min showing strength since yesterday, the red trendline is the support area that was broken (now resistance).

 The 5 min 3C chart looks equally as good for UUP.

 Longer term, the 15 min chart didn't even acknowledge the break of support. If this is because of accumulation on that break as it appears, then that gives more credibility to the "false breakdown" theory.

 Looking at the Euro using the ETF FXE, we see a similar inverse divergence in which the upside (possibly false breakout) is not being confirmed.


And here's FXE's 5 min 3C chart. On the 1 minute there's a small zone suggesting an intraday bounce which started around 12:15.

I'll update again as needed and at the close