ERY Chart Request

ERY is a 3x leveraged inverse ETF for Energy, or a 3x Bear Energy ETF.

 This is the 30 min 3C chart of ERY or "the big picture". You can see accumulation in July, confirmation of the rally in August (green arrow) and distribution on a parabolic spike in August (red arrow), then confirmation of the downtrend (green arrow). There's no positive divergence on this chart, so the move up in ERY, which I believe is coming, is not going to be as big of a move as the two previous moves up and down.

 The 15 min chart shows some hints of accumulation recently, it also gives a clearer picture of when distribution started and how the parabolic spike was and generally are, great indications of a turning point, they play the same role as a false breakout for the same reasons.

 The 10 min 3C chart gives us a clear picture of when accumulation started in ERY, it has been largely over the last two days, which is good for a pretty decent move, maybe 2-3 days or so up, perhaps another day or two for a reversal down, it all depends on how quickly the shares that were accumulated are distributed.

 The 5 min chart shows us when price was being confirmed by 3C in the green box and when 3C went positive and started to lead price in the white box; again roughly 2-days.

The one minute chart isn't screaming it' ready to pop, there could be a longer period of accumulation, but there are a few signs if you compare the relative placement of price and 3C at the peak and trough, both the peak and trough showed bullish 3C action.

I think ERY has a few solid days of gains in it, of course that fits with my stance in the short term on USO.

The Miners Trading System

Tonight the signal for both system 1 (the faster system) and system 2 (less false signals) remains long NUGT

The RIMM Game Plan

Here it is from 8/15

RIMM has held inside the consolidation zone that 3C suggested it would move into.

And there's been some decent volume.

So far there's good 3C confirmation across almost all timeframes, save for 2, suggesting the possibility of a slight pullback, I would expect support to hold and look for RIMM to move above the $30.00 area and then some, at that point we'll watch for a short set up and when to take long profits. So far, so good.

That 10 min positive divergence

I know some of you are a bit confused by the pocket of strength I showed you earlier in the 10 min divergence across all of the averages. I wasn't sure whether to post it or not as it causes confusion and I myself found it to be out of place, but I owe it to my members to give you the most current information. So lets take a look again.

 Here it is, the 10 min positive. Note that the market recovered off those lows nicely, so I suspect it was a pocket of strength meant to lift the market intraday.

The 15 min chart is more important to the bigger picture and it is negative suggesting that pullback I've been talking about since yesterday. Also note in the red box, where the 10 min positive occurred, price is going up, the 15 min 3C is going down, so the 10 min positive so far has had no positive effect on the 15 min chart. I have to go with the more powerful chart, which is the 15 min and assume that the pullback is still on.

FOE Follow Up

FOE was a long trade idea from yesterday, 8/15

I was looking for a pullback to the yellow or blue moving averages as an entry, that happened.

 The 60 min chart looks great...

 Today FOE is down on the pullback I was looking for, but the 1 min chart is showing improvement.

I would prefer a wider stop on this trade initially, this is the range I would consider and the wider the better, you can always tighten up the stop and add to the trade when t moves in your favor.

Silver Short Soon...

 Earlier in the month I pointed out this 60 min positive divergence in SLV, since then it has gained some ground.

 This is a 15 min chart and a more detailed look, now there are hints of this current rally going negative.

 The 10 min chart shows this in more detail

 And the 5 min chart also shows it, so there's pretty good confirmation.

 Looking at ZSL, the short on silver, it has seen a recent positive 15 min divergence.

 The 10 min is positive as well

Back to SLV, the way it is trading today it looks as if an HFT is running it higher on lower volume, there aren't many natural pullbacks, I would be looking for an opportunity to short silver soon using ZSL. Perhaps watch the 50 bar average across the 1/5/10 and especially 15 min timeframes as a signal, you can check with me on the break of any of them. I'll also set alerts.

PMT Follow Up

PMT was a long trade from 8/5 @$17.03

The trade is about flat, but the price pattern looks great and there's a 12.40% dividend yield.

 I like the price pattern, it looks like it' ready to breakout.

 We have a long signal just hours away on the cross-over screen, 2/3 signals are long.

 Here's the current trend channel stop

Most of all, the daily 3C chart looks fantastic. I see this as a longer term trending trade.

An Interesting Signal

At the recent afternoon lows a positive divergence has shown up on the 10 min charts, it's new, just today.

 DIA  10 min chart with a positive divergence at a relative new low

The same on an IWM 5 min chart

 The same on a QQQ 10 min chart

 And the same on a SPY 10 min chart.

The negative divergence in the 15 min charts like this SPY, take priority over the shorter term charts like the 10 min, but if the 10 min continues to build it will filter into the 15 min chart. 'll be keeping a close eye on this, but as of now, still expect more of a pullback.

Some Short Term Trades

Here are some ETFs you may want to take a look at for a pullback in the market, might as well make some money.

 EDZ Short Emerging Markets

 ERY Energy Bear 3x

 FAZ Financial Bear 3x

 SDOW Ultrapro Short Dow-30

 SQQQ Ultrapro Short QQQ

 SRTY UltraPro Short Russ 2k

TZA Small Cap Bear 3x

KCG Long Trade Management

KCG was a long idea from 8/5 the trade is up about 7% or better, depending on where you entered.

 Here's the original trade.

 This is the daily long signal and the yellow 10 day average which is usually the area of the first pullback for those who take a longer term view to this trade.

Here's the daily Trend Channel Stop, this will keep moving up so feel free to contact me for the current stop position.

 For a tight stop, I would use this 50-bar 30 min moving average.

There are signs of a pullback coming, but...

The 5 min chart suggests KCG may try to make it a bit higher, perhaps a new intraday high before pulling back, for those looking to maximize gains, I would consider selling a portion or all of the position on a new intraday high.

Disappointment in Europe

Germany's Merkel and France's Sarkozy held an emergency meeting, one in which the "market" which I cll dumb money, was pricing in solid, concrete action from Germany and France; they didn't get it.

Key highlights from the conference included:

"Maybe Eurobonds may be imaginable one day"
"Not enough integration for EU bonds now"
The bottom line, nothing for now, which is not what the "market" priced in. However, look at these charts...

 FXE (EURO) showing distribution into the move higher in FXE

 The same seen here on the 5 min FXE chart.

 The Dollar being accumulated while it was down.

And the DIA showing distribution while it climbs, (short to mid term 3C, long term still bullish).

The point being, while the market may have had bullish expectations, obviously smart money knew more then anyone and was acting on it during the rise. This is why we watch the underlying acton.

A Quick Lesson

I often tell you that a head fake (a false breakout, etc.) is usually one of our best timing signals, they tend to precede the reversals we are looking for.

In one of the last market updates I showed you a negative divergence in the SPY (also in the other averages) that I thought would turn the market down, which it did. However, make a mental note of the head fake effect as a timing signal, both on a micro basis-like this intraday turn around and on a macro basis, as in the pullback I've been expecting in the market before it will move higher. The false break seems to be one of the best timing signals for such reversals.

 Here was the 1 min negative SPY divergence from the last update, note 3C is lower at the daily highs.

And those daily highs just pierced yesterday's close, briefly turning the SPY green and likely triggering a flood of limit orders/stops. Since technicians understand resistance and support as exact levels, rather then areas, the had fake can be done with only a move of several cents.

My Outlook on the Market

For my broad outlook, both near term over the next day or to and beyond, make sure you read last night's Daly Wrap 


I'm starting to think as I started to allude to last night, that OP-EX Friday may be in play with the shorts itching to get back in the trade, Wall Street selling a bunch of puts and then taking the market higher would cause some extensive pain. Thus far the signals are falling in line with that outlook.

ERX chart Request/USO Update

As mentioned yesterday, I expect in the near term uSO will pullback, however the bigger picture remains bullish.

Here's a leveraged Energy ETF, ERX (Energy Bull 3x)

 1 min 3C showing what appears to be the pullback point in ERX

 15 min 3C suggesting the pullback will be fairly substantial, part of the head fake, it must be believable to the shorts.

 However, the more important big picture on the 30 min chart is in a leading positive divergence. This is why I believe as I said yesterday, this is the head fake I was looking for last Friday, before the market moves higher.

 USO 3C 1 min looks the same as ERX.

 As does the bullish 30 min chart, which s the bigger picture.

Here's USO testing the pivot today and finding resistance there. I suspect a pullback to hit the S2-S3 level. In the mean time, short term traders may want to play the pullback using ERY long (a leveraged Energy Bear ETF). There may be a few days in that trade.