Oh, that had to hurt

Talk about volume rebates! Any longs in there were taken out, shorts who jumped in where taken out on the upside move, longs who came back in where crushed again and any shorts who entered on the last move, may very well be crushed early next week.

Could they put their stop at a more obvious level? Heck, I can see the book for several levels, W.S. has the entire book, they (Wall Street) would be fired for not hitting those stops and generating the volume rebates that probably just added up to millions of dollars just in the last 10 minutes.

Stop Being Hit

Volume surges right on the break of intraday support. This is why traders shouldn't put their stops on the books where they are visible.

TICK

The TICK chart is getting stronger in to the close.

 The intraday NYSE Tick chart

Even sector rotation is getting stronger toward the lose in many groups, financials, Energy, Health Care, Industrials and Discretionary being key.

Interesting for such a bearish market.

GLD EOD Post

 The 5 min chart has shown improvement today, suggesting on the open next week we see some strength, I expect it will be short lived.

Here's the more important 15 min divergence, in this post "Gold Continues Lower, For now..." 
I said that the GLD decline wasn't going to last because a good reversal needs a 15 min negative divergence. I fully expected GLD to test the 7/27 highs or exceed them and at that point, I expected a 15 min negative divergence. I posted this just yesterday and today those expectations played out, from higher GLD to the 15 min negative divergence. I think any strength in GLD can be used for a swing trade down. It might develop in to more, but one bridge at a time.

URRE Long Trade #2

We did pretty good with the last URRE trade, although they have been on a swing basis. From what I see and from the fundamentals of a supply squeeze, I think URRE is putting in a long term base and still working on it so we've been swing trading it. I stated at the end of the last long trade that URRE will pullback and almost certainly be under accumulation during the pullback, it seems that is the case.

 Here's the long term bullish pattern, a descending wedge, they are counterintuitive patterns, but they tend to be pretty successful. The rule of thumb is "a wedge retraces its base", putting an eventual upside target around $3.50.

 Here's the 30 min negative divergence that ended the last long trade, note the accumulation.

 The 15 min chart shows the same.

 as does the 10 min chart

And the 5 min chart.

I would not be surprised to see URRE head a bt lower and put in a more powerful 15 min positive divergence, it should be watched, but t seems it's getting lose to its next swing leg up.

Market Update

 It looks like the IWM hit some intraday resistance, you can see the small negative divergence (red), but note the relative position of 3C from the resistance level formed this morning and now (compare 3C at the white arrows)

The 15 min chart provides an interesting similar relative comparison.

The same comparison on the DIA 15 min hart.

 On the QQQ 5 min chart

And the 15 min comparison on the SPY chart.

DIG/DUG

Anyone remember the game?

DUG on this 15 min chart looks close to a reversal.

That would mean DIG would be the trade.

The End of the HOV Story

I should have included this chart...

We see the 2000 leading positive divergence/accumulation and this on a 5-day chart! There was one brief negative divergence in 2002 that led to nearly a year of flat prices (red box), but largely the trend was confirmed (green arrow) by 3C making higher highs with price, that is until the 2005 top. Again, this is one chart, but I've studied this case thoroughly and can tell you there were plenty of distribution signs.

The market -The Real Market

So we are moving back up a bit, basically I think it's on news that Obama will consider a 2-day extension on a short term deal.


However, does anyone find it strange that short term accumulation in the IWM and then the SPY preceded this announcement  by as far as I can tell, at least 90 minutes in the IWM and about the same in the SPY?

I personally don't think 3C would work very well if it were not for Wall Street quietly acting on non-public information while the masses are focused on negative price action.

I hearken back to the home builders accumulation during the 200o tech bear market. First of all, I think most everyone thought the next bull market would again be led by advances in Tech, secondly, there hasn't been much of a historical precedent for a housing boom leading a bull market. Housing typically appreciated by low single digits or so in most areas. So was it a lucky guess? If it were, they were sure darn committed to the guess.

Take a look at HOV during the 2000 bear.

 HOV weekly accumulation. I've studied this period extensively, I use the weekly chart for convenience.

 Here's HOV vs. the NASDAQ 100 in 2000, the yellow area is HOV's accumulation zone of nearly a year.

 Here's the decline in the NASDAQ 100- nearly 83%

And HOV's climb, 2482%

I'd say someone had some pretty good information about the housing boom that took off in 2003. Some suggest that Fed policy was more or less a gift to the banks regarding housing to make up for losses during the tech meltdown.

A year or so of solid accumulation in housing, way before anyone knew housing was gong to prop up the entire economy through the last bull market? Unlikely it was a lucky guess or superior analysis.

SRS Trade Update

In This post I updated the SRS stop

We knew resistance was coming up and it might be a problem, so here's some new charts/stops and info.

 Here's the resistance, and I can see a pullback from here.

 Here's the original stop, which will still keep you at breakeven at the worst.

 This stop is a bit tighter.

10 mn negative divergence upon crossing resistance, suggests SRS pullback and load up for the next leg up.

SPY Update

The SPY has finally broke from near perfect confirmation of today's price action to a positive 1 min divergence, echoing the earlier IWM positive divergence intraday.

I Had To Do It

I just couldn't resist after seeing this under the title of "Summarizing the Negotiations in D.C"

Link

On the Turkey Story

Apparently the link didn't work, lets try again.

IWM

The IWM 1 min is looking like it is preparing for its next intraday leg higher.

This is the exact same chart as above, I'd like to get some feed back as to which size you prefer. TIA.

MENA Revolts Spread to Turkey?

Article Here

Revisiting QE2

In this post a couple of nights ago, I outlined and summarized why I've been bearish. I made the case that Quantitative easing was little more then a golden parachute for the insiders at major corporations and did nothing for the economy. Now we see the Q1 revision a mere half a point away from a recessionary quarter, and this is while QE2 was in effect.

Here's the GDP trend

Only Q1 of 2009 hit 5% and that was revised lower, you can see the trend after revisions. In fact Q1 may be even worse after the next revision, Q2 will certainly be worse and the trend is likely to continue down. In fact, with revisions, we may find out that Q1 and Q2 were both running below zero and two consecutive quarters of sub 0 GDP=recession. As for Quantitative Easing, I think this chart speaks for itself.

The Power of Contradiction

Contradiction is usually a word with negative connotations, but in Technical Analysis, it can be a sign of things to come. 3C is an indicator with the power to contradict prices, which means to show us the underlying action in price. We've all seen the positive divergences of the last 3 days now and after the news on GDP and the drama in Washington, it's kind of hard to believe the averages are trading in the green right now.

This power of contradiction also has the power to give me an ulcer, as I've said, t's difficult to show you these charts in the price environment we are in, but these are your edge and part of your decision making process.

So below are some of the more significant charts in the majors.

 DIA 15 min

 IWM 2 min

 IWM 15 min

 IWM 30 min.

 QQQ 15 min.

 SPY 1 min.

 SPY 5 min.

SPY 15 min.

USO Update

I've been very consistent on what  expect from USO based on the 3C charts.

 Here is the bull flag type pattern in USO, there was a 4-day breakout in which I have maintained that I did not believe this breakout would hold. My opinion has consistently been that USO looks good for the intermediate term, but first it will need to pullback into the flag and undergo accumulation to make a second and real breakout of the flag. The last 3 days, USO has pulled back into the flag.

 Here's 15 min 3C accumulation

 10 min 3C accumulation

 5 min leading positive divergence/accumulation

And the same on the 1 min.

I can't say for sure this is enough to effect a true breakout, USO may need to spend some more time accumulating a larger position, but I do see what I have expected. I would like to see a test of today's lows or perhaps a bit lower with an even stronger 3C 15 min positive divergence, at that point I would be very confident in a solid move up.

As for the dollar/Oil relationship, I stated about a week ago that I thought we were going to see some breakup of the normal, historical dollar correlations.

I haven't done an exhaustive study of the correlations, and this would be a new trend, but there are some recent indications that the inverse correlations are not as strong.

USO in green/ UUP in white

GLD Update

Earlier I mentioned the update from yesterday in which I expected GLD to rise and I would be looking for a 15 min negative divergence which has not been present thus far.. Well on today's move up, we got exactly what I was looking for. This is bearish for GLD for the short-intermediate term.

As suspected, there it is, played out exactly as posted-a bit quicker the I expected, but there it is.

CSE Short Trade Idea update

I posted a follow up on CSE on 7/21 in that follow up I said, "I would have liked to see a target around $6.40-$6.50, maybe we still will, but the charts are falling apart."


As the market would have it, CSE ht that target zone this morning. Here's a look at today's charts.

 Here's the weekly chart, CSE gained about 700% since the 2009 bottom, note the recent red volume in the top area.

 Here's a look at the daily chart and the target zone I was looking for to enter the short.

 This is the 5 min chart of today's intraday action thus far.

 The daily 3C chart seems to be calling this a top with multiple negative divergences including today's.

 You can see the negative divergences on the hourly chart during past attempts to clear the top's resistance level.

 The 15 min chart is negative right now as well.

 And the 1 min chart is negative on the open.

While you could try a trade in this area with a stop of your choosing, I would prefer to see the 15 min hart look a lot worse before entering here unless you are aware you are taking a more speculative trade and have planned for that. The highest probability entry is on a break back below the tops support/neckline. If I see the 15 min chart deteriorate more, I'll post another update.