A Surprise

I was surprised, really nearly shocked when I ran my scan and looked at the Price/Volume relationships. Remember, there are 4 and it's only meaningful if there is a dominant theme. Take a look at these and see if you can spot the dominant theme.

The Dow -30

 The NASDAQ 100

 All NYSE Stocks

 The Russell 2000

The S&P-500


It shouldn't have been too hard, yes it was Price Up/Volume Up. This is not only the dominant theme, but VERY dominant. This theme also happens to be the most bullish of the 4 price/volume relationships in just about any market. This shows there was appetite for risk, traders were willing to bid up stocks and didn't back away from higher prices, of course this all has more to do with Wall Street then anything.

It's also an interesting relationship considering where we are right now. Remember earlier today I mentioned we are still in a lateral range and it is in lateral ranges we most often see accumulation and distribution.

We are also near the breakout point of that range...

And all of this despite bad economic news today in the Richmond Fed Survey and New Home Sales. This is the kind of market action, ignoring the news, that is typical of Wall Street running a play as I speculated about last week.

Here's a look at the influential sectors needed to move the market higher.

We can see Industrials, Tech and Energy are strong, only Financials needs to pick up some steam.

Here's a look at some various Financials

 XLF 15 min 3C

 FAZ (BEAR Financials) 10 min 3C

 IYF 5 min 3C

 IYF 1 min 3C

 FAS 1 min 3C

 FAS 2 min 3C

UYG 2 min 3C

The recent 3C strength in a spectrum of financial ETFs seems to be suggesting financials will be in rotation shortly.

I'm off to look at more charts.

Energy...

Last week we were in the ERY trade, however  warned almost every time I posted on it that it would be a short lived trade. I think everyone who was in the trade was able to get out in time, at least most of you who email me frequently.

So I'll show you both ERY (Energy Bear leveraged EFT) and ERX (Energy Bull leveraged ETF) to give you some idea of what I was talking about with Energy looking better ( believe I posted XLE charts earlier today as well).

ERY-Energy Bear

 The 15 min 3C chart shows the the end of the previous cycle and the start and stage 3/4 of the current cycle (stage 3=distribution/stage 4=decline). We wanted to be out at the second red arrow.

 Here's the 10 min chart confirming distribution

 The 5 min chart shows more detail INCLUDING a head fake new high n the red box with a deeper 3C negative divergence. You hear me talk about head fakes a lot, it' because they happen a lot and as you can see, they tend to happen right at the point of reversal.

 Here's 1 min chart confirmation  and a slight bump up in 3C, maybe we get a gap down in energy tomorrow, which should be a good place to look at buying if you want exposure to this industry group.

ERX Energy Bull

 The hourly chart is very bullish

 As is the 30 min 3C chart


 There's more detail on this 15 minute chart of ERX showing another negative divergence with a head fake making new local highs before reversing down.

 The 5 min hart and the typical lateral range that accumulation occurs within so frequently, also a leading positive divergence.

And the 1 min chart, showing a little brief weakness going into the close, again hinting at a possible gap down in the sector tomorrow a.m. or some early weakness.

All in all, Energy looks to be coming together well.

Closing Market Update

It looks like the averages will pullback and maybe open lower tomorrow, GLD and SLV look ready to rise at the EOD trade.

 DIA looks set to pullback

 GLD looks set to bounce a bit intraday

 The Q's are set for a pullback

 SLV is set to bounce a bit.

SPY is set for a pullback.

MCRL Update

This morning  posted MCRL as a possible long trade 


I liked the trade right there @ $9.62 or on a breakout above the "W" bottom's resistance with some volume. MCRL is right in that breakout area, show if you are interested, now is the time to keep an eye on it.

 The resistance area of the "W" bottom

 60 min 3C leading positive divergence

15 min 3C leading positive divergence

ROYL Update/Chart Request

First of all, XLE (Energy) is looking pretty darn good on its own. Lets take a look at ROYL.

 The last time there was a daly divergence in ROYL, it ran nearly 300% in several days, we are again forming a daly positive divergence in ROYL.

 The 30 min chart has been accurate in calling the swings and is now leading positive.

 The 15 min chart, which often is a good timing indicator is also in a leading positive divergence.

 As is the 10 min chart.

As to what I was talking about this morning with regard to the market and double bottoms, Technical Analysis believes the second bottom or the test should fall short of the lows of the first bottom, but it has been my experience that there' almost always a head fake lower as we see here in ROYL and that is often a good timing indication. I would not be opposed to a well managed trade going long ROYL right here with a stop just below today's low on a closing basis.

GLD/DZZ Update

At  9:48 this morning I questioned whether GLD was broken. At 11:30 this morning I posted this trade idea short GLD/long DZZ ( $183.34/$3.94). 

The trade idea was a low risk set up and  know for a fact that several people too it, some playing short term options so they should be having a great day.

Here's GLD now...

GLD has now taken out Monday's range as well as Friday's close and total range.

DZZ is up over 8%, I'd like to know how our options players are dong on the short GLD trade?

This was a great example of a low risk trade, so long as you kept you risk management in place, it was virtually, well lets just say it was a very limited risk trade.

GLD taking out the last -days of trade range is another story altogether and belongs back with my original post, "Is GLD Broken?"

Successful Test?

It's a bit early to say but there are some indications that t may have been.

 QQQ 5 min still in a negative divergence...

However, the 1 min chart which responds faster has put in a positive divergence and is now in line.

URRE Follow Up (long trade idea)

Please see the last post on URRE from 8/18, I have expected it to continue to fall, but I had hoped to see sign of accumulation as it did, so far so good.

 URRE Daily chart-be sure to see the last update as well.

 URRE 15 min 3C

 URRE 10 min 3C

URRE 5 min 3C.

So far we are seeing the signs of accumulation I hoped to see during the pullback. I think we may have another 10-15% of downside to go before it bottoms, but that could be off a bit. Certainly in the $1.00 area I want to look at URRE as a longer term long position. There are great fundamentals and the daily chart is superb.

Keep this one on your watchlist.

Market Support

As I thought, the market fell to the support level that I figured support would kick in.

 The support area at the "W" intraday bottom breakout as well as the 50 bar 5 min moving average.

You can see 3C s showing a little fight being put up at this support level, we'll see if it holds.

This morning's post

Don't forget about this morning's post, we have bullish behavior in the market and I feel it's likely we'll see a lot more before the second shoe drops, but remember the post from this morning-'m not convinced we are done with the basing process.

For example, looking at the SPY

 Technically speaking, we are still trading in a lateral environment, these lateral environments are often when accumulation occurs, but can be choppy.

However, 3C looks much stronger at this second low then it did at the first.

Market Update

My last market update I showed you the early signs of an intraday pullback, here's the updated charts.

 DIA 5 min 3C and 50 bar moving average-target $109.75 would be a reasonable minimum target.

 QQQ 5 min 3C/50 bar m.a. The 50 bar m.a. about lines up with the small intraday double bottom breakout area, thus this are makes some sense to me as a support zone.

The same on the SPY, everything that applies to the QQQ applies to the SPY here.