IOC Update

IOC is a position we have had to be patient with, some of you entered recently on some recent updates and probably have a decent profit. I opened a core short position in the equities model portfolio which I'm going to have to re-evaluate as I have core shorts in XOM, IOC and a position in USO which is a lot of exposure to energy in an already highly correlated market.

I also opened a position in the options model portfolio, a Sept. $95 put.

We have a member who has stuck it out with this trade, put his faith in 3C that IOC would turn and when it does his broker closes the position on him because they can no longer borrow the shares! I've had this happen a few times with the same broker (which will go nameless), if this happens to you I encourage you to call the district office (if your broker has one-it's always good to have a good relationship with someone at a district office-I had my commissions cut by 20% because of the relationship and because I asked), make some noise and tell them you want them to call other brokers and see if they can borrow the shares. Most of the time they can't borrow them and that's why they closed it, but if you have a good relationship with someone at the office, I've had them go the extra inch and find the shares for me, I was also making between 100 and 200 trades a week back then too.

Here's the IOC Update, as for USO, I'll wait for the EIA inventory report tomorrow morning and see if it gives me an opportunity to look at adding to USO if that's the direction I go in.

 IOC daily broke above a recent resistance zone, created the pivot last Wednesday and didn't do anything else since to confirm the break out-no follow through. Yesterday was a nice close as far as candlestick charting goes, a nice confirmation day and below the support area. Today IOC seemed to be lingering around a near term support area at the red arrow, it may be because of the EIA report tomorrow or just the typical loitering we see when important resistance/support is broken. I'm not crazy about the Doji candle close today on higher volume, you know why as I have shown this to you about 6 times today. I'll feel better with IOC under the next support area and I think it will get there, however in deciding which energy position to stick with, opportunity cost will be a factor.

 Here's the 60 min chat and the support I mentioned, notice IOC spent the whole day in the area shaking the tree of stops/orders.

 As for my Demark-inspired custom indicator on a5 day setting, we have a sell signal, only the 3rd real signal on the chart in t he last 3+ years.

 The 15 min chart was already in a bad place strategically, the last several weeks have shows a very nasty divergence that is more tactical. This is one of the reasons I treat and consider IOC as a head fake/false breakout trade.

 As IOC moved above the resistance area, look at the leading negative divergence/Distribution in to that move (yellow on price/red on 3C). In addition to the closing candle there's a 3 min positive divergence that I wouldn't normally pay any attention to if the daily candle hadn't closed as it did. Still I view this as noise/volatility if we do see an upside move off today's 3.81% decline and yesterday's 4.36%% decline, it wouldn't be unusual to see a relief move to clear out some shorts.

 The 1 min chart is in line with price so it may still migrate to the 3 min chart.

 As for shorter term moves as in "since the June lows", the daily Trend Channel has held the move, it did give a sell signal/short signal today with the close below the channel.

On a longer term basis as a core short, I want to see IOC close below the 2 day trend channel.