Check Back in in a few hours, I'm putting together a post you won't want to miss

NFLX Gets What They Deserve

I usually don't get biased about stocks, but I was given a NFLX account last Christmas for my Wii and after the first month I cancelled it. The movies were 10 years old. It was just a horrendous service, a good idea, but horrendous execution.

Speaking of execution, NFLX reported. The ironic thing is they beat on top line and EPS! What caused the -21% tanking in After Hours, people like me. Their subscriber base was decimated and they expect it to continue, I do as well as a former customer.

They already lost -60% n 3.5 months, I guess there won't be a dead cat bounce.

Euro Update

 Sine the Euro correlation is so strong, a Euro update seems reasonable. Here are support and resistnce levels both breached today.


 A closer view

 Short term Euro

 Intermediate term Euro

Longer term Euro

One of the stronger ES Divergences during regular hours

Regular hours means much more volume and that is important as ES is easy to ramp in the middle of the night.

A Rare Moment of ZERO Correlation

Market/Euro

Update

 Short term IWM

 QQQ, volume suggests this was some type of intraday trap. It could be coincidental to the Euro, but I wouldn't expect the 3 chart below to look like this.

 QQQ

 Same with the SPY

SPY...

Update

That $125.60 area continue to look important. The Euro hit a new high on the day and backed off from that. Here's the SPY, note volume.

 Check out the volume moving above $125.60 and the volume moving below $125.60

XLF for the second time couldn't make a new high. I need to check the sector cycles again.

Financials Follow Up

Earlier I posted an update on financials and the last thing I said was to watch financials as they may lead the market.
Take a look at this chart.

Remember the post had a lot to do with relative strength? This is XLF in Green and SPY in red, at the white arrow they both make new highs at the red arrow only the SPY makes new highs as XLF hits resistance from the former high. Some times it's just these little clues.

NYSE TICK INDEX

This is the total number of advancing issues minus the number of declining issues, which is why it was strange to see it in a downtrend earlier today while the market was moving up. You can think of the TICK Index as a sort of breadth indicator or a read on the strength of a trend by how many stocks are participating.

Here you see the long term downtrend today with only a brief uptrend around the time the Euro tested last week's highs, now that uptrend is broken and seeing readings in the negative. This is one reason I feel that the support level shown in the last chart is important as the TICK Index would suggest that the market was simply following the Euro higher, but there wasn't broad NYSE Component strength behind the move up, creating a very parabolic spike that is potentially quite thin.

Market Update

The EUR has tested last weeks high at $1.3950.

 ES 5 min has finally turned negative here.

This SPY trendline around $125.60 will be an important level intraday.

Financials Request

I was a bit surprised looking at financials. In fact I checked the sector reading and expected to see then much weaker.

 Financials (green) are pretty strong today  (relative strength vs, the S&P). With the Euro up so much, I was surprised Energy didn't post better readings and with the Q's up so much, the Tech readings were a bit of a surprise.

 I started with XLF (Financials) and saw the intraday trend on the Trend Channel close to being broken to the downside. ADX on this timeframe is also starting to signal the end of the trend as it reverses down from above 40.

 XLF 1 min has gone negative in a flat area.

 XLF 2 min is leading negative.

So is XLF 5 min

 Since XLF, FAS and FAZ are each different averages and trade different volumes, etc, I looked at both FAS (Financial Bull 3) and FAZ (financial Bear 3x) to see if there was any confirmation. Above is FAS 1 min which looks worse then XLF 1 min.

 FAS 2 min looks worse then XLF 2 min.

 FAS 5 min looks about the same as XLF 5 min.

 And Fas 15 min look plain bad.

 Here's FAZ (Financial Bear) with the same Trend Channel settings as XLF and it is close to breaking the intraday downtrend as well as having ADX turning down from above 40 which also signals the downtrend is ending.

 The 1 min chart looks super.

 As does the 2 min chart.

 The 5 min chart looks moderately good.

And the 15 min chart looks very good.

I would keep an eye on what financials are doing, they may lead the market.

URRE CHART REQUEST

A long time favorite just waiting for its moment, URRE. This stock has gained nearly 150% in 3 weeks and it's looking like a consolidation is in order and deserved.

 Here's a massive bullish descending wedge, the general rule of thumb is that wedges retrac their base, giving URRE an eventual upside target near $4-$3.50

Here's an example with the Dollar index.

Note the 2009 bullish descending wedge and the rally from there that retraces almost all of the base. There's another bullish descending wedge in the Dollar Index now.

 This reminds me of how stocks "use" to trade before EUR correlations, the death of cyclical rotation and the advent of high speed High Frequency Trading and their algos. Maybe URRE is too small for them to bother? There's a nice breakout from the wedge, a pullback to wedge support and a move higher on good volume and a very typical /consolidation configuration the last 2 days. Remember this has been a 150% move in less then a month, it is healthy to consolidate. I suggested last week trying to take some profits and if at ll possibile, try to take your original investment off the table and let the profit run.

 Here's the crossover screen I showed you last week and as I predicted, the middle window has crossed over (which is a custom indicator) and it has a long signal. Usually after a breakout, the first pullback is to the 10-day moving average in yellow, but the longer URRE stays in place, the higher the 10-day will move up. Second pullbacks tend to be to the blue 22 day average.

 Heres the daily chart, 3C and the wedge are bullish and look at lot like the Dollar Index in 2009 and now.

 The 30 min chart shows the signs of consolidation, however consolidation can be through price decline or overbought conditions can be worked off through time in a pattern like a triangle which seems to be developing, although it my be a little small.

 For long term trades, this 4-day Trend Channel has held uptrends and down trends in URRE perfectly, the current stop would be around $.75 but that will move up fairly quickly each day.

For shorter term traders or those considering partial profit, the 60 min Trend Channel has held the recent strong move up and is at the $1.25 area -it too will continue to move up, but not as fast.

I still like the trade, but this is a long term trade, 6 months or more as far as I can tell.

I Never Trust Parabolic Moves

Especially this early in the day.

For example...

You can see the last parabolic moon shot didn't end well for the Euro.

 Here's the ES Futures chart.

 Here's the IWM is an Ascending Wedge, which is supposed to break down, but we almost always see them break up first before breaking down as this has done.

 The same Bearish Ascending Wedge in the QQQ has broken up first as usual for the pattern now-a-days.

 The QQQ 1 min in a much more severe negative divergence then the one that sent Friday's early morning highs down.

 The same with the 2 min.

 SPY 1 min is similar to the negative divergence that sent the market down from the Friday a.m. highs.

As is the 2 min.

Plus in general, I don't trust parabolic moves, and parabolic moves this early in the day, even less so.

A FEW SKEWED RELATIONS

The market started off very much in sync with the Euro after the ECB intervention in European bond markets.

As mentioned there's Euro resistance at $1.39 (red trendline).

Strangely though the TICK Index is trending down, while the SPY (in red) has been trending up, meaning fewer stocks are participating, and the Index has even dipped in to the negative -700 range.

 The FXE green vs SPY red has broken the correlation a little.

However the DOW has broken the correlation a lot, also being the worst performer today.

Just something to keep an eye on.