Frustrating Friday

That's what I'm calling today. So far 3C has been pretty square on the money, t suggested a bounce is brewing and we went from a rapid decline to a lateral trend, that was a bg development considering the downside momentum in the market just 10 days ago. Then 3C showed accoumulation and said the market will bounce, it did so, then it said "resistance is too strong, the market will have to pullback and regroup", the market pulled back yesterday, so I'm happy with 3C's calls so far, but today has been frustrating to see anything that I would consider a strong signal.

Here's about the best I've seen and it isn't what I was hoping for, but that could be because traders usually lower risk going in to the weekend, not increase it.

 60-min -Considering price action, the fact that it hasn't moved down is a good indication.

 30 min- This one has actually moved up a bit.

 15 min -this is an important timeframe and today it's moved up a bit, despite prices.

And the 5 min, well it's marginal.

Thus, "Frustrating Friday"

Hopefully Monday will show some better signals.

FTWR Follow Up

Years ago I would never have traded a stock below $10, then that universe changed and I had to include $5 stocks. However, back in 2007 I noticed 3C had a knack for picking moves on the Cats and Dogs, especially on the daily chart (this is before  I really understood 3C, or better said, the market). So in 2007, 3C was gong nuts over a stock, it was BPZ-a sort of C&D trade at the time-under $5.00.

Any way, BPZ went on to make Trade-Guld readers about 400%, that's also about the same time I learned how useful my Trend Channel was, I could have taken profits at 50% or 100%, but I caught almost the whole 400% ride when I stopped making arbitrary decisions about profit taking and left it to a non-emotonal indicator.

So now I have a better understanding of the Cats and Dogs, when they appear, when it's better to hold them and when it's best to take profits quickly. You have to be comfortable with risky, speculative trades, but the returns can be incredible in a day or two.

So lets take a look at a recent C&D trade idea-FTWR from Tuesday, June 21

The recent price action since the idea may not look like much, but that's an 18% gain!

 Here's a tighter intraday stop, although I wouldn't choose $1.20-maybe $1.21-$1.22 or so.

If you want to give it a bit more room, $1.16 or so.

You could also go with the daily stop, although that wouldn't be my first choice, it could work with partial profits around this area and let the rest run on the daily @ $1.01-that's a lot to give up though and this isn't the trending environment.

Financials update

Tuesday and Wednesday I said the market wasn't gong to be able to break resistance without a pullback first and there needed to be accumulation during that pullback.

This s the period of the pullback on a 5 min chart and as you can see, we've seen some positive divergences through the lateral areas in yellow, in fact the most recent pullback in FAS today, produced a 5 min positive divergence as can be see at the white arrow. The Greek debt rally yesterday was a bit of a set back as institutional money isn't going to chase higher prices. I pretty much prefer that bounce didn't happen although I know some of you made some money on it. I'd actually like to see this progressing a bit faster then it is and I'd be curious to see what this chart would look like devoid of yesterday's afternoon rally.

I'll continue to monitor the situation, I do like the positive divergence just made on the FAS pullback on this 5 min chart, but ultimately we need to see these divergences on a 15 min chart before the market is ready or willing to make another move against resistance from earlier n the week.

Silver/Gold Update

I've been bearish on both Silver and Gold, particularly in the midterm, I think gold specifically may offer a long term opportunity to buy at a good price if it can fall for awhile longer. I'd consider going long gold around its 150-day sma (simple moving average).

 The large pennant n GLD suggested a directional move was coming as volatility narrowed. The false breakout was a sure sign that GLD was going to see a fast fall, which it has.

 More or less, anyone who bought within the red rectangle is now at a loss, the false breakout is what creates what I've called the snowball effect, as these buyers sell as their losses mount.

The concern with a first breakdown, is the often seen pullback or kiss the pattern good bye. I feel better that GLD will continue lower,  I have some concerns , but not as many as with SLV.

 Here's the 3C negative divergence on the breakout-a great timing signal and it gives you a good idea of what's to come, usually a steep sell-off. So far the 15 min 3C is in line with price, suggesting more downside to come.

 The 5 min chart is also in line with price, this is good for GLD shorts.

SLV

 The danger in SLV is the larger pattern in red, it could be considered to be something similar to a large bear pennant, which would have a deep downside target. These patterns aren't usually this large, but it's market psychology that creates them. You can see the recent break below the pennant.

 Today's intraday trade for SLV has been pretty bearish

However, I'd feel a lot better about SLV's downside prospects if it were to make a new low. Either way, SLV looks to be going lower, the question with SLV in particular is whether or not it tries to retrace/bounce back into the triangle before heading lower, which is an important question for those who are using options-it's a matter of timing.

PCLN Trade Idea-Short

I've liked PCLN as a short for awhile and have mentioned it several times. Time to take another look. First of all, PCLN was a POMO darling, one of the stocks that was chased by leveraged margin traders, thus in my opinion, it has a lot to lose. PCLN s trading at a P/E of 42.89.

 This weekly chart shows volume expanding on the rise from 2005-2008, as it should in a healthy stock, but look how thin volume has been as it has traded in the QE era from March 2009 -2011. Not only has the price action been parabolic, but on low volume, it just shows that PCLN has been largely manipulated higher through the QE era.

 MACD (I use a long version to cut out noise) went negatively divergent at the top and has continued to make lower lows with price.

 Daily 3C went negative at the top and has traded in line with price since.

 The 30 min chart has a negative divergence

 As does the 15 min chart

 And the 5 min has looked horrible even when other stocks and averages have looked much better,
it seems that any price gains lately have been used for distributing this highly leveraged position.

 My trade screen for avoiding false/whipsaw crossovers has been on a sell signal and remain there.

The 2 day trend channel caught the entire move of 152% without 1 false stop out, the current short trade stop is at $507 which is about 4.5% higher, I can live with that in my risk management planning.

I know it's an expensive stock, but we are looking at the % gain you can make with your money. I'd rather have 10 shares of PCLN then a 1000 shares of a stock that doesn't have the same downside potential.

Just an idea for you to consider.

FAS Continues to look better

I'm looking at the underlying action...

 Look at this chart of FAS and where 3C is right now compared to 3 p.m. yesterday roughly at the same price level.

Here's the inverse of FAS, FAZ (Financial Bear) and again, compare the two relative price points and 3C's placement.

Early Market Update

I say early because that run in to the close yesterday wasn't helpful in accumulating shares, which is already going a bit slower then I had hoped, but I did want to show you these charts as a follow up to the post yesterday during the run in which  said, "this is not accumulation"

People get too worked up about price advances on volume thinking it's institutional money doing the buying, in fact, they are often selling at that time.

 Here's the QQQ 1 min and in red is yesterday's run on the Greek news, note the closing negative divergence at the highs of the day. This morning we are seeing some positive divergences in a relatively flat trading environment on lower volume then what we saw late yesterday. It may seem boring and like nothing is happening at times like this, but you can see for yourself the positive divergence in this environment (yellow).

This is the 1 min SPY and in red, yesterday's run in to the close, note in yellow the flat trading range and lower volume as well as the 3C positive divergence.

I'd like to see these divergences migrate to the longer charts, then I might look at accumulating some shares of Bull ETFs or long positions.

FAS

Looks like FAS may make a quick intraday run here.

Postive at the white arrow.

On the market

Yesterday we had a fast move up in the afternoon on some Greek related news, I put up this post about the run the post ended, " 3C shows clearly this wasn't accumulation by institutional buyers, they're not chasers, they buy quietly. I'd imagine they'll want to bring prices down a bit to start accumulating"

I'd think we are heading toward the bottom Bollinger Band marked in white.

Another one for the Radar

URG is a C&D as far as price goes, volume can be fairly substantial for a C&D trade at times from 1 mm to over 4mm shares on a decent move.

This one may be forming a "U" shaped bottom.

 You might set an alert looking for a pullback if you like the trade.

 Again, there's a fairly substantial 60 min positive divergence here. The real juice in this trade would be a break of $1.80. As usual, this is to be considered a speculative trade for risk and trade management purposes. I often suggest taking partial or total profits on any 1 day double digit gain.

URRE Follow Up

Make sure you keep an eye on URRE, if you don't mind the C&D trades. Ever since the false breakdown, it's been edging higher.

 The white arrow s the false break.

There's still a very healthy 30-60 min positive divergence here.

Remember, this is a speculative trade.