Have you noticed 3 p.m. is rumor time?

It's crazy now, there's nearly a daily effort to lift the market in the last hour by some pretty insane rumors. Today's was provided and refuted by the same news agency, Reuters! That's crazy, what about due diligence in reporting?

ESM BAIL-OUT FUND TO BE GIVEN BANKING LICENCE - DRAFT
ESM BECOMING A BANK "OFF THE TABLE"

So here's the latest...
Euro-Area Countries Ready To Provide IMF With Bilateral Loans, According To Draft Seen By Dow Jones


The catch? Mario Draghi said that loans to the IMF to purchase European bonds would be legally unworkable.


Furthermore, any loans creditor nations extend further deteriorates their standing as far as S&P ratings downgrades not to mention the political cost. Germans will love that their tax paying dollars are bailing out Greece and Italy!


So.... How long until this one is refuted? It certainly isn't moving ES which at this point is probably just plain worn out by the lies.

AAPL Head Fake...

A Rumor does wonders...

And there's the negative divergence on a quick apparent head fake.

If you liked the idea of this trade, I hope you got in...

This is ridiculous!

Green=Rumor / Red = Denial and all from the same source!

The EOD Sewing Circle in Full Effect for a second day!

The market's got a lift from the typical late day rumor, this one from Reuters:

ESM BAIL-OUT FUND TO BE GIVEN BANKING LICENCE - DRAFT


Then ironically, again from Reuters:


Euro zone officials said a proposal to give the ESM a banking license -- which could allow it to access European Central Bank funds, boosting its firepower -- had been rejected.


Oh my!!! There's more to come....

AAPL

And there's the breakout I mentioned...

Now to look for the negative divergence on the short term charts, then we'll have a low risk/ high probability swing short in AAPL.

Why Placing Stops is Important

first of all, if you've read the links on risk management and stops, you know that I try to NEVER EVER place a stop limit order with a broker because Wall Street and anyone with Totalview can then see your order and I did do this once when I went on vacation and my position was stopped out by ONE CENT and the stock then went on to rally and I lost all the profits. It reminds me of that mistranslated Japanese Video Game that was all over the net for awhile, except in this case, "All of your shares are belong to us!!! "

Secondly, never place a stop at a whole number or anywhere near an obvious level like support/resistance, a price pattern or moving averages. Look what just happened in the QQQ on a $.01 move below the intraday lows.

That's a 1 cent move below the intraday lows of $56.30 to $56.29 and look at the volume spike as stops were plundered on a fishing expedition.

Market makers or any black-box/HFT system makes money on the bid/ask spread (the more volume the more they make), they make money on even a little run like we see right now, and they make money on back door volume rebates. It's simply too easy for them to make a quick buck and with almost no effort.

So keep all of this in mind and check out the links on the site about stops 

Here's that AAPL Daily Chart

Trade-(short)-AAPL Definitely worth a look up here

 Even with a head fake, or especially with an upside head fake, AAPL looks tempting as at least a swing short.

 The 5 min chart has fallen apart badly over the last 2 days.

 The 30-60 above and below look bad as well, it appears AAPL is in the final stages of this bounce.

The daily chart I can't seem to upload, but you may have seen it before, it too is negative. I think AAPL is probably worth a shot here, but keep in mind you may see an upside head fake out of the triangle, that would probably make an even better entry if it happens

Market Bounce Update

The possible bounce I mentioned earlier primarily based on the Q's not breaking yesterday's intraday lows, seems to be losing momentum.

 DIA starting to go negative

QQQ going negative.

The SPY is still inline and financials look a bit stronger then the rest so they may have some additional room, but I still view it as an intraday event.

Gold Lower Amid rumors of Central Banks Selling/ How to Trade Falling Gold

In  either case, the long term picture for GLD keeps deteriorating. I've covered the near term GLD charts pretty extensively, so we're going to just take a quick look at the longer term indications.

 Recently we have talked about large triangles such as this acting as tops and bottoms, note the volume is perfect for the formation and we are very close (a few points) from breaking below the triangle's support.

 The 150 day average has been a great place to but, but the sharp decline to the 150 day recently has caused me concern about buying GLD this time.

 The long term Money Stream indicator, like 3C is very negatively divergent, suggesting heavy distribution.

 And 3C has been in confirmation for nearly 7 years, now it goes in to a similar leading negative divergence as MS above.

DZZ is a leveraged inverse Bear ETF for Gold, note the very positive money stream divergence, the exact opposite of GLD, suggesting this triangle formation is a base.

 Volume is correct for the formation and it is very interesting how volume has had an extreme change in character recently.

 ADX suggests the end of the DZZ downtrend and the Trend Channel is almost showing DZZ as a long, it won't take much upside to break through the Trend Channel.

 The short term 3C for DZZ is very positive (5 min).

 As is the 15 min chart

 the 30 min chart and...

The hourly chart, all suggest DZZ is under heavy accumulation, which would tend to back up the view that Gold may be in a bubble or at least an intermediate top of some consequence. The confirmation in DZZ makes the case much stronger.

3C Market Update

 SPY breaking below yesterday's lows, usually on a break of important support there's a test of the failed support, we'll see if that comes.

 This illustrates both the fractal nature of the market (due to emotions) as well as the manipulation of long standing (100 year old) technical patterns that traders have grown so accustomed to, while Wall Street runs head fakes on these patterns as technical traders still haven't adjusted to Wall Street's games. So here's a head faked triangle on a small scale.

 Here's a head faked triangle in the SPY on a larger scale, the trendline represents the apex of the triangle and where the move would be considered a false breakdown, another apparent head fake on a larger (fractal) scale.

 The current bounce in my Trend Channel has broken through the stop out point and typically means a reversal s at hand. ADX also turned down from above 40 signaling the trend (up) is ending.

 SPY 1 min thus far is in line confirming the downtrend.

 The 2 min chart may not have caught up to the downside, but as it stands there's a slight positive divergence which would suggest an intraday bounce, maybe to test the broken support of yesterday's lows.

 Longer term where we can reduce noise and see the longer term trend, the 30 min chart is now leading negative to the downside, so although we may see counter trend bounces, dead cat bounces, etc, 3C is signaling that the trend has changed, distribution has already happened and there's little to no underlying money flow support for the uptrend.

 The hourly chart which is more important to the longer term trend looks just as bad.

 The DIA has also broken yesterday's lows which would have been local support.

 The trend channel is also signaling a break of the uptrend as well as ADX in the lower window.

 The DIA 5 min chart is in line with the downtrend/confirmation .

 The 15 min chart which is an important transitional timeframe is now leading negative and pretty sharply as most of the leading divergence is from today alone, which is unusual to see this early on this timeframe.

 The DIA 30 min chart looks really bad and leading negative.

 The 60 min chart looks equally as bad.

 As of this capture, only the QQQ is yet to break yesterday's lows, which may provide the market an area to stage an intraday countertrend bounce.

 However the q's have broken below the trend channel stop out for a long position, usually signaling a change in trend.

 The 5 min QQQ chart is inline, but also at an area of a relative positive divergence which could produce that possible intraday bounce mentioned.

 The long term QQQ chart is horrible and this is a close zoom, the real positioning is below.

As you can see, there was accumulation for the October rally, but now we have a new leading divergence, my guess is this is the lowest reading for the entire year and well below the October lows.

Context Model

Our risk/Credit indicators are more specific as the CNTEXT model lumps them altogether, but it shows the model (meaning risk assets) is performing worse then ES at this point.

Credit/Risk Assets

 Commodities as pointed out yesterday didn't rally with the market but instead sold off from the open, closing near the lows of the day. Today they have been largely in line, but show, as the short term USO chart did, a little better recent relative performance, suggesting an intraday bounce most probably in commodities as well as equities.

 The longer term dislocation shows commodities acting very badly in this "Risk on" bounce and this is the kind of dislocation we want to see when adding to or starting new shorts on equity price strength as the other risk assets are not confirming a true "risk appetite".

 High Yield has been largely in line with the S&P today as would be expected.

 Yields have continued the sell-off started yesterday and as they should, equities have gravitated towards yields.

 The larger picture shows an extreme dislocation between yields and equities as yields have not been able to make a new high throughout the equity bounce, which leaves a severe dislocation and a lot of downside for equities to gravitate toward yields.

 The Euro intraday is outperforming equities thus far, which also suggests a bounce in the market as legacy arbitrage black boxes by "perceived" value in equities.

 Long term the Euro has not made a higher high throughout the bounce and remains severely dislocated from the stock market

 High Yield Corporate Credit  has been in line with the S&P since late yesterday.

 However from yesterday's open, it did sell-off.

 It also remains dislocated on a longer term basis, which is what I'm looking for in these indicators as an entry point for shorts.

 Financial momentum today has been on par with market performance.

Although it has lagged badly when looking at the bigger picture.