Market EOD Update

While we won't see it today, it looks as if some weakness may be built into tomorrow's trading specifically on the S&P

3 attempt have all fallen short to bust through resistance around $134.50

USO UPdate-CHART REQUEST

 HERE'S THE CANDLESTICK REVERSAL I'D EXPECT TO SEE CONFIRMING THE 2 REVERSAL PATTERNS FROM YESTERDAY.

 5 min 3C

 10 min 3C

15 min 3C

Even the 30 min has a positive divergence, so it looks like we'll see a real move up here.

TGT TRADE (SHORT)

This is another margin squeeze, we already know as I posted probably 2 months ago that grocery stores would be feeling the squeeze, now the discount big chain retailers that get everything that is made up of commodities that have rising to yearly or all time new highs, squeeze their margins and drag on their EPS.

TGT looks primed...

 A possible Broadening top or a H&S top in the making, either way there's a downside target of the red trendline to start.

 While I wouldn't mind being short now, you could wait for support here to be taken out under $53 with a stop around $55.60.

Here we see perfect confirmation for over a year and then a negative divergence before the break down.

Ford (F) Short Trade

I have to imagine with commodities across the board rising, F has to be feeling the margin squeeze from rubber to steel to some precious metals used. Therefore, I view this as a longer term trade and have a longer term stop associated with it.

 F with linear regression on the flag and correct volume for a bear flag. MACD also in line as it should be.

 The daily 3C negative divergence.

 And the hourly was the real warning as it plunged on a leading divergence on a test of local highs.

Here's the stop, right around or just under the $17 dollar level which has held previous trends very well.

XLF Hinting?

XLF has failed to keep pace with the market today, that could have to do with the Court decision regarding MERS and MERS response to banks not to foreclose in their name or it could have to do with the leak that the Fed has ordered some of the biggest financial institutions to undergo a stress test assuming 11% unemployment.

In any case, the financials are not keeping pace today.

 XLF breaking down under the wedge seen in most averages.

5 min negative 3C

10 min negative 3C

This should impact the S&P first and hardest as the S&P has about 22% exposure to financials.

DRYS Update

DRYS looks worthy of consideration here.

 a H&S top with a test of resistance that failed and it's starting to roll out of the bear flag.

 15 min 3C shows distribution at higher prices near resistance.

In the red zone is a Trend Channel Stop that gives you a good risk:reward:probability ratio on the trade (short). Just keep it in mind, I like it even here.

Not to rain on the parade

Just a note of caution here.

Silver has broken out and there appears to be what I'd call at least profit taking so it's important to watch if you are long SLV.

 Intraday breakout to new highs.

3C negative divergence at new highs.

This may just be profit taking, but you want to watch to see if price can hold above the breakout level.

SPY Update

If you caught my late night post I figured on today setting a new high and this most likely being a false move whether it reversed today or in  few days, I don't know, but here's what it looked like.

 Price sits under resistance of yesterday's close forming an ascending triangle and then the market moves it higher on  slight burst of volume setting the new high, Volume hasn't been enthusiastic in chasing price here.

Current 1 min. 3C negative leading divergence. It's still early, but we could see a reversal today in the afternoon, I don't think it's very likely, but what we are seeing here plus volume is not inspiring from a bull perspective.

Another Confirmation of High Commodity Prices Squeezing Margins

The Philly Fed Index came out with the prices paid component surging nearly 24% in a month. Over the last 5 months it has surged  (if my math is correct and I believe it is) 450%. Looking at just this last month the 24% rise in prices paid was up 12.9 points to 67.2 while prices received is up only 3.9 points to 21. The difference between the two is now at the widest point seen in 32 years.

As I mentioned, companies will try to first streamline meaning more jobless people, cheaper quality materials, smaller portion sizes, etc. However, this phenomena doesn't look like it will stop anytime soon looking at the CRB index and despite what the Fed considerers inflation. This is hitting small business the, heart of America (small businesses easily employ more people then large businesses in America by triple digit margins) the hardest. How Wall Street can even be flat on a day like this is a controversial question to say the very least.

USO Follow Up

Here's Yesterday's afternoon commentary on USO and here's where we stand now...

 In the white box we have 2 candlestick reversals, a Harmi and Tweezers Bottom, volume was also up which often accompanies a reversal. Today we have a gap up; so far so good.

 The 15 min. 3C chart

10 min 3C chart.

Both of these charts are timefames that usually predict a swing move pretty well, so I'd think we'll see some upside from here, whether "v" shaped or "u" shaped.

FBC just Triggered Long

 This is one I've set an alert on for a breakout of the cup.

This is a possible stop, it's a bit tight, feel free to adjust it according to your risk tolerance.

TSO still chugging away

if you are treating this as a swing trade, it's time to start thinking about trailing a stop behind it, you could use a 50 bar m.a. on a 30 min chart for a tight stop or on a 60 min for a bit looser. Or you could just take some partial profits and let it ride and see if this one won't trend another couple of legs higher.

Today's Action

The one thing that stands out in the trading stats is the price : volume relationship which was pretty firmly camped out in the Price up/ Volume up. Often when we get a strong relationship like today's (which is the most bullish) it often serves as a one-day overbought condition. Considering the ascending wedge, I would guess that we'll see some false moves around the wedge, perhaps an upside false breakout and maybe a lower close, It's difficult to say what the configuration will be considering the two events that seem to be high probabilities are  false move and an overbought market (short term).