AMZN Earnings

We have at least 1 winner!

Earlier I posted AMZN's 3C charts going in to earnings, they looked really bad except the 1 min chart, which is the only thing that kept me from calling it an earnings trade, but one member ignored that 1 min chart and jumped on board and made 12+% in a few hours!

Still think insider trading and leaked earning are just Wall Street fairy tales?

XLF-Financials Update

Yesterday I said, "Watch XLF, it is likely to lead the market down". And as the market is making new lows, XLF is one of the biggest losers at -3.20%

 XLF about ready to break another support level.

 2 min XLF yesterday with a bad negative divergence into resistance-currently leading negative.

 XLF 5 min also warned yesterday and is in a worse leading negative divergence.

And the hourly has now fallen apart. This is not good for the S&P.

Something Strange is going on

After almost an entire year of ever increasing correlation between the Euro and the market to the point where it has been at a 1.0 relationship, today it's off and not by a little.

I used the QQQ (green) vs the FXE/Euro (red) because the Q's are the first t really break the morning lows to hit new lows at a -1.73%. Look in the white box, the correlation is perfect as it has been, then look in the blue box and note how far apart the correlation is, almost as if it doesn't exist anymore. I know we also saw it in USO and we have the Thursday BOJ currency intervention that should send the EUR lower, but a day before the big meeting, it seems more like a pure risk off environment. We'll find out soon enough and hopefully this non-sensical correlation finally passes.

AMZN Earnings

AMZN reports after the close, this isn't an earnings call because of 1 chart.

 Until today, I would have said AMZN misses or doesn't do well on earnings, but today's 1 min hart is out of place.

 The 15 min chart would otherwise have me say they won't do well.

The same goes for the 60 min.

EOD Market Update

 These captures are a little old for such short term charts, but they are relatively unchanged. There are some 2 min positive divergences of varying degrees-this is the SPY

 The QQQ

 The DIA-They suggest a late day bounce effort.

 The 5 min chart zoomed out is very negative and leading negative which is the strongest divergence.

 The close up also shows leading negative so it doesn't seem like any bounce at the EOD will get too far.

 The 10 min chart s leading negative-this is what I like to see, multiple timeframes aligning at the same time.

 The long term 15 min chart showing a large amount of accumulation going in to this rally and a leading negative divergence now.

 The 30 min chart goes back to June before the crash, you can see the warning signs of the crash at the left, ever since, this entire consolidation has registered as a negative divergence and now leading negative.

 The 60 min chart is also deep leading negative, at each top there's a white arrow, not one showed even a slight negative divergence on this timeframe, so to have a leading negative is pretty bad.

 Here's the 1 min ES Futures showing an earlier negative divergence and an inline status now.

 The 5 min shows a slight leading positive divergence.

 The 15 min is very negative and leading.

 As is the hourly

This is the 4 hour, also fallen way out of line and leading negative.

In short, I wouldn't be long this market for any reason.

SLV/Silver Update

 In just about every SLV update over the last several weeks I've mentioned this base and accumulation near the bottom of the base.

 Here's today's action, roughly in line, but a slight negative which is understandable as a consolidation or some short term profit taking after such  strong move.

 The 5 min chart shows the continued accumulation during the base described above.

 The 15 min chart shows distribution sending SLV lower and the accumulation during the base, which is substantial. It's leading positive right now.

Even the 30 min hart shows strong accumulation during the base.

I would dare to say that SLV has a lot of upside potential, hopefully it will do it in a way that is not too volatile so the COMEX doesn't force a margin hike on the PMs.

ERY Chart Request

Remember the USO chart post and the Euro post as both have an influence on ERY which is not a crude short, but an Energy short or leveraged inverse ETF.

 ERY 1 min shows accumulation yesterday and yesterday was another day we saw that same divergence between the Euro and USO. It sent ERY higher today.

 The 2 min has a fairly decent base carved out and is in a leading positive divergence

 The 5 min hart even more so with a long leading positive divergence, this would imply a base big enough to support a sizable move in ERY to the upside.

 ERY 15 min also shows a good base and leading positive divergence

And the hourly was leading positive over the last week, it would seem the base is intact and ready to start moving up. We may see volatility in the EUR over the next two days, but ERY looks to have a strong enough base to weather any negative volatility.

BOJ/YEN Intervention Part 2

The BOJ-soon to be-action, may also explain in some part my earlier post on FXE/Euro negative divergences.

It was bound to happen

Thursday the Bank of Japan will meet and apparently partake in yet another currency intervention as the Yen just today, set post world war 2 record highs v, the dollar. The BOJ will intervene to drive the yen down and this may just explain the break up of the Euro/Market correlation as the intervention should send the Euro lower. However between the EU summit tomorrow and the BOJ meeting Thursday, it is shaping up to potentially be a very volatile week and perhaps the week that killed the Euro-that remains to be seen.

 This is far as I can zoom out on the USD/YEN chart, but as you see, the Yen made new highs today vs the dollar.

Here's the earlier mismatch in Euro/Market correlation (QQQ vs FXE/Euro) and you can see once the BOJ news came out, they started to move closer toward correlation, so I assume that this is another case of insider information.

I Hate To Point It Out

But it has just become TOO obvious.

CNBC would chalk this up to a range bound market that is cautious ahead of tomorrows EU summit, I's calling it a bear pennant, which would have the expectation of continued downside, however, these obvious patterns get head-faked 85% of the time (conservatively). Given my earlier market update, unless something changes, I would think the head fake would be to the upside, hitting the gap along the way as mentioned earlier and then a downside move, which of course depends on what happens with the EU, but that's my initial take after seeing so many.

GLD Update

 It's been very hard to figure out if golds correlation has been a safe haven trade or a weak dollar trade This is GLD in green vs the Euro in red. When the Euro goes up, the dollar goes down and stocks should rise, when the Euro goes down, the dollar goes up and stocks should fall and when Gold rallies when stocks fall, that is the safe haven trade. The older correlation is a weak dollar means rising gold prices, in which stocks also rally, but gold has switched back and forth over the last few months. Yesterday a strong Euro did nothing for the gold weak dollar trade. Today is more confusing as the Euro isn't down much, stocks are diverging from the correlation as I showed you, but all in all, gold seems to be a safe haven trade today. It's all very confusing, no doubt, but to understand where gold is likely to go, a correlation that is dependable would be good.

 Heres the daily chart with GLD's fall which was steep and abrupt, it hit the long term 150 day moving average which historically over the last few years has been a flawless entry point. Back when it fell, I said that GLD had fallen so hard, it really needed to consolidate along the moving average and build up some strength. Today it "seems" to be emerging from that consolidation at nearly a 3% gain.

 The 1 min chart is NOT in line with price, this is a little disturbing.

 The 2 min hart was in line with price, but has since gone negative.

 The 5 min chart is perfectly in line.

 The red area is when I said GLD had moved too far from the moving average and needed to pullback which it did. There was a positive divergence on the pullback and GLD is in line on the 15 min.

The 60 min chart has a good start. If I were long here, I would try to keep an eye on the short term charts and make sure they don't go negative in to the longer term harts and for now trail a stop.

The short term harts could be showing some profit taking and there may be some fear that the volatility today may trigger a COMEX margin hike. However, it would seem very early for something like that, but it seems COMEX is controlled by higher powers and their hikes don't always correlate with increased volatility. I'm cautiously optimistic on GLD.

EUR/Market Divergence

I keep noting these, I haven't figured out quite what they mean yet. HFT algos are programmed to buy stocks on a rising Euro/weak dollar and the correlation is usually nearly perfect, but once in awhile we see these divergences. 2 weekends ago I suggested that from a risk perspective and considering why the Euro was rising (the repatriation of Euros in to European banks) that perhaps the HFTs were feeling like they were chasing an artificial rally in the Euro which actually had negative underpinnings and thus were increasing their risk. I hypothesized that they may make some changes over the weekend to their algorithms.

Here are today's divergences between the market averages and the EUR/$USD. The Euro (FXE is in red).

 SPY vs Euro

 DIA vs Euro

QQQ vs the Euro-in this case this is the worst as the Q's are close to intraday lows and the Euro at intraday highs.

There's some correlation here worth noting, if you keep a trade journal you may want to make note of this and look back in a few weeks.

ES Futures Update

 ES 1 min is negative.

 This is a wider view of the ES 1 min chart showing a negative divergence in to the overnight highs.

 The ES 5 min chart has been in line most of the day, it went positive inside the white box, which is inline with my last market update.

The ES 15 min chart doesn't look so hot and has seen some leading negative damage done today.

This all pretty much fits with what I expected from my last market update.

Quick Market Update

It looks like the 1 and 2 min harts want to bounce up some more, around 5 mins they all are negative, 10 15, etc are negative.

So  would expect as mentioned earlier an attempt to fill the gap and then most likely a sell-off in to the afternoon, especially with the Euro meeting tomorrow.

The Euro

I feel like the Euro may be one of the most important things we can analyze. I also feel that it is one of the hardest things to analyze, jumping wildly from rumor to rumor. However, there are trends in place and historical 3C charts have shown decent accuracy.

 On the 1 min timeframe, you can see yesterday's 4 pm close, the EUR/USD is still trading slightly above $1.39

 On this daily chart you can see there is serious overhead resistance at $1.40

 The weekly chart shows something that looks like a long term top.

 The 1 min FXE/Euro is pretty much in line with trade, even slightly positive.

 The 5 min FXE chart gave up a lot of ground between yesterday and today and is leading negative.

 The 15 min chart shows some of the accurate 3C divergences and right now a 15 min chart that has taken a turn for the worse in to a leading negative divergence,

The hourly chart has had some nice calls as well including the bottom which the current rally came off, but the 60 min chart is now leading negative as well.

The Euro is difficult, especially with the pace news is coming in, but this is the best edge we have right now.