EOD Wrap

I'm going to keep it short because the market wasn't giving away many clues today except in ES.


First the trade internals, we saw lower than avg. volume on both exchanges (NYSE 763 mln, vs. 800 mln avg; Nasdaq 1470 mln, vs. 1734 mln avg) and more impressively decliners outpaced advancers by a sizable margin (NYSE 739/2247 Nasdaq 777/1719)


Based on the Advancers/Decliners I would say the market is somewhat oversold, that isn't reflected in the Price / Volume relationships in which there was no dominant relationship today. 

As you probably know, trade was like watching paint dry, but whenever we have a dull market, there's usually some big volatility around the corner.

As for ES, it gave the only really strong signal today.

 This was the only clear standout divergence and it came when AAPL hit support at the lows of the day (actually we saw it develop about an hour before that).

ES (S&P E-mini Futures)  was turned back several times at VWAP (Volume Weighted Average Price) and trade size picked up each time ES hit the VWAP, suggesting institutional sellers were active at the VWAP.

Several averages are crossing their 10-day and some 20 day moving averages.

 The Dow below its 10 day and near the 20 day

 Same for the Russell 2000 which looks a lot worse

And the S&P hit the 10-day today.

Of the commodity complex, gold actually had the best day, still down, but closing near its highs and outperforming the SPX

I'll be keeping an eye on ES throughout the night and will post if anything comes up. My gut feel though is we are a little oversold, although that's hard to say in a market that is sooo overbought.

APPL is the market

And this is why we have been following AAPL so closely. As I said yesterday, "Which came first, the chicken or the egg? No it was AAPL".

Take a look.

 AAPL moves to intraday low support

 So does the SPY

 DIA

 QQQ

 and IWM

 AAPL 1 min in line even with the bounce off support.

 AAPL longer view of the 5 min leading negative

 Up close intraday though, in line.

This ES divergence has been nagging at me and as I write this post, I see why....

Thus far the only one to show a divergence is correct, as you can see ES is moving up

AAPL

AAPL is nearing support.

While we have this chart up, remember I said earlier AAPL longs are die-hard, well this triangle is an ascending triangle, it's  bullish continuation pattern except in the wrong place, it should come after a move up, not down. However the pattern alone is probably enough to get AAPL longs to BTD. The move below the apex would have stopped some of the traders out and thus you have the manipulation of technical traders. Even if AAPL runs to $610 from here, those longs were stopped out and this is the way the HFTs make money in a market that has Billion of dollars less money in it each week.

Market Update

Well there really isn't much going on, maybe they're waiting for the F_E_D Balance sheet at 4:30?

 DIA 1 min with an early positive, the rest of the day is pretty much in line although 3C looks a bit higher then it should be for in line, but that may just be scaling.

 The 5 min from a positive today to a negative at the intraday high to in line.

 The 15 min chart, beyond intraday movement and daily volatility, the larger trend is quite ugly.

 ES is one of the strange standouts with this positive divergence.

 IWM 1 min today is nearly perfectly in line, seeing the same early positive and 1 p.m. negative.

 The same is seen here on the IWM 2 min

 The larger trend in the IWM 15 min is leading negative, so bounce or not, there's still the bigger trend that is ugly.

 QQQ 2 min -a little longer view, there was a positive divergence in the a.m., a negative around 1 p.m. and it is pretty much in line right now.

 The same is seen on the 1 min today

 The 15 min leading negative

 SPY 1 min, positive divergence in the a.m., negative at 1 pm and in line since.

 The same on the 2 min

And the 15 min is leading negative, but somewhat in line or trend confirmation.

Still, these quiet spots always have me on the edge of my seat as they don't last long.

All of the averages are pretty much confirming each other, only ES really stands out, but on the other side of that, the VXX 5 min is pretty darn positive, which would suggest the opposite of what we see in ES.

VXX 5 min

We don't get too many days like these and I suspect the change is part of the change in market character.

Way too Quiet

It seems volume is picking up a little too much here for no movement and a bullish 15 min candle.

On the other hand, the TICK has been very negative and the VXX 5 min is stronger then I have seen it in awhile.

 A lot of today's action has been at -1000 to -1400

VXX 5 min

There's essentially two games going on in the market at all times, the HFTs trying to drive intraday volatility as there's a lot less volume in the market for them to make money, thus more head fakes and then there are the large funds that are moving directionally.

Maybe a tell in ES

This is small and just started, but ES has been mostly in line today, to the far right there's a little leading positive divergence, that may be a tell for a bounce intraday... It's just too quiet.

AAPL Update

 AAPL has broken below the triangle... Although this could be a head fake move...

 The 1 and 2 min charts are in line with the break below the triangle

But until I see this 5 min really fall apart, I won't be convinced that AAPL is ready to roll over again

It's too quiet

This market is too quiet, I have a feeling we'll see a surprise shortly.

A Look at Some of the Leveraged Short ETFs

I just found this to be interesting...

These are longer term charts of leveraged short ETFs

 FAZ-Short Financials

 FXP short China 25 (this one we've been trading)

 SIJ-look at the confirmation on the downtrend and the first positive divergence in months in Industrials

 SKF short Financials, the last positive divergence that lifted SKF was rather small compared to this one...

 The updated Edwards and McGee take on wedges, no they don't break out at the apex any more, rather they build a base and look at the red arrow, there's the little head fake shakeout...

 SRTY, note the increased positive divergence at the shakeout (30 min)

 SRTY 15 min again, accumulation at the shakeout.

 TYP Short Tech, the last positive never even went leading.

 TZA Short small caps, there's that same wedge behavior and shakeout.

TZA

Interesting...

IPGP Trade Idea (Short)

This i one to keep on the radar, I don't usually like shorting H&S tops in this area because the first break of the neckline usually sees a volatility shakeout back over the neckline so you need a pretty wide stop, but if the market is tanking with it, we may get away without the volatility shakeout, or you can just keep it on a watchlist and keep an eye on it for opportunities.

 It has the look of a H&S top, RSI is negative in to the head and volume dropped off as it made its high. Volume then picked up coming off the right side of the head and there was no volume on the right shoulder advance. I threw together a quick cumulative volume indicator in the price window so you could see the volume action more easily.

 On the 60 min chart you can see 3C didn't follow price lower in the white box, it was leading positive there (accumulation) , however you can see the distribution clearly in to the run higher. Locals take large positions, they can't exit them in a day without sending price against them so they sell in to strength as you can see above. 3C is leading negative at the right shoulder so I would guess this quick cycle (stage 1) accumulation, stage 2) mark up, stage 3) distribution/top and stage 4) decline) is probably being shorted by the locals at this point getting ready for stage 4 decline.

The 30 min chart confirms the 60 min

 Here the short term 2 min chart looking at the right shoulder, you can see some accumulation at the neckline and distribution in to the right shoulder top and a leading negative position now.

 This is the 1 min chart intraday for the last few days, the divergence has sent IPGP mildly higher, still this is only a 1 min intraday chart.

The Trend Channel held the uptrend and broke at the red arrow. I prefer wide stops on initial entries, but I'm guessing the top of the Trend Channel now would be about right for a stop, of course the closer IPGP can move toward that area, the less risk there is in the trade, or you might wait for a break of the neck line. If you are interested in how IPGP is progressing on the intraday chart, just email me.