Risk Assets Update

 There seemed to be a bit of late day arbitrage activity. As you can see, on a relative basis, the SPX (green) held up better then commodities until the end of the day when they converged. I think this was more arbitrage then anything else.

 If I add the EUR (inverse proxy for dollar strength), commodities tracked much closer to the dollar while the SPX held a bit above until the end of the day where it seems arbitrage programs may have kicked in where they all converged at the close.

 High Yield Credit is still holding up, it's relative cheapness and beta makes it a good choice for a quick bounce, but it tends to lead, so the fact it did not sell-off shows a positive divergence for the SPX here.

 Yields tend to lead the market, the macro picture shows the deterioration in to the bounce that was expected, short term toward the EOD, Yields moved up a bit, somewhat supportive of the market very short term, with the bigger picture showing the strength in price yesterday is really a facade. To the left in white, Yields led the market higher.

 This is the Euro again and the late day move in the SPX seems to just be an arbitrage move toward dollar strength.

 Corporate Credit sold off a bit, but still remains positively divergent and supportive of the market near term.

 As you can see in white, in the past market weakness with Credit strength has been able to lift the market higher. It is that negative divergence in red we are looking for to signal the end of the move.

Sector performance was interesting toward the end of the day, as mentioned earlier financials look weak and the continued leaking off all day, however what is surprising is the defensive Utilities sector started strong as would be expected on a market move down, but leaked off from there, almost indicating the market is expecting another risk on move. Healthcare did the same to a lesser degree. Industrials and Discretionary started to strengthen, again indicative of a risk on move and although small, Tech did the same.

My opinion remains pretty much the same after looking at these harts, it looks lie the bounce has a bit more to go with Tech taking the lead from financials.

BIDU over $152 intraday

In my earlier update for BIDU, I said I wanted to look at shorting it above $152, this is why price alerts are so useful, although my Friday the 13th Gremlins in my computer didn't give me a chance to get in to a position there. Perhaps a Tech bounce will keep it in the area?

 2 min as BIDU moved above $152 intraday. This is what I expected so I would have taken the position, even if I had to deal with a little draw down. The best head fake move would be $152 on a close looking the way it does. In any case, BIDU is still high enough to make the trade worthwhile eve at $150 or a bit lower.

 The 5 min chart in BIDU negative at $152

AAPL's 5 min chart is now in the strongest position it has been in since AAPL started moving lower this week as it is leading. This also fits well with the QQQ 5 min chart. I have been thinking there would be a rotation to tech before the bounce is complete, AAPL and the QQQ today seem to back up that view.

The market for the most part moves together, although relative performance is different because of rotation, so I would think the most likely outcome is tech moves in to rotation and has the strongest relative performance, the other averages and sectors should be in line directionally, but the relative performance should be weaker.

GDX update

After the gap down, and a lot of stocks look like this, GDX was able to hold in a lateral position. It looks like the move there is not done.

 2 min positive divergence

5 min leading positive.

Speaking of financials

 FAZ 1 min is doing what it should with the market acting the way it is today.

However the 5 min strength is building, again, even if FAZ gives back some next week on a continuation of a bounce, I wouldn't mind starting to build a position short the financials here.

Market Update

 DIA 2 min is in line, which is not to say very strong

 The 5 min chart is the same

 The IWM 5 min chart is similar to the DIa, it looks like big caps and small caps will underperform.

 IWM 2 min is more negative short term then the others.

 This looks like a fairly strong positive in the Q's, I think this alone should be able to drag the rest of the market higher with it, but we are clearly moving close to the end of this bounce.

 SPY 1 min has some weak short term positive divergences

The 5 min is in line.

Bottom line, it looks like some tech rotation and then I suspect this bounce will be dead. Financials may be worth a look for a short position or partial position with the SPY looking this way.

TYP position

I'm using about 5% of portfolio for TYP April $9 calls. This is a fallback position as the weekend may bring who knows what. I still have longer term positions (puts) in BIDU, but have not entered the position I was hoping to on strength yet.

TYP, the Q's vs the IWM

 TYP 5 min(I'm looking at Calls here, I'm willing to sit through some draw down to have the over the weekend coverage). The 5 min is holding up well here in this leveraged small cap bear ETF.

 The IWM 5 min chart, not looking that hot.

The Q's look much better, suggesting rotation to tech as expected.

Friday the 13th

For the last 45 minutes my computer is acting like it has a virus. I think it's finally loading, but everything shut down.

From what I see, the Q's have a decent 5 min positive divergence, that look like the tech rotation I was expecting.

The IWM looks significantly worse, but should still move with the market. I will be starting a small TYP Call position just for over the weekend coverage.

The SPY is in line on the 5 min, short term 1-2 min it doesn't look as strong.

The DIA looks horrible.

I may look to short the DIA here as well.

I'll get charts up ASAP

Quick Market Update

 The 5 min Q's look like we will see that rotation toward tech.

The SPY doesn't look quite as strong.

The IWM looks the weakest, I may look to open a position in something like TYP before the EOD.

I have to do a quick restart as I'm having memory leaks, it should take about 15 minutes.

The F_E_D Good Cop Bad Cop Routine continues

It all depends on what the market needs at that exact moment as to which speakers (doves or hawks) they parade out. In Bernie's speech today, there was not even a hint of QE, this won't go over well with the QE addicted bulls.

Full Speech from the F_E_D website.

RENN Trade Management (long)

 The RENN long is up about 25+% since the idea, yesterday I recommended a trailing stop.

 Volatility has picked up as you can see in the lower window, the Trend Channel (60 min) shows a stop around $6.55, which still allows for some consolidation.

 Using a 22 bar ma on a 60 min chart, the stop is closer to $6.45.

If you are looking to really preserve profits, the 30 min 22 bar average will do, but will not allow any room for further consolidation. You can always consider phasing out of the trade as well.

There's some 1 min distribution in RENN, the 5 min chart is still holding up. I'm all for taking profits in a choppy market especially when they are double digit in several weeks, however if the market can build some strength here as it appears it is trying to do, RENN may get a shot at some more upside. If RENN closes on heavy volume with an inside day (the way it looks right now), I would prefer just to take the profit as that would constitute a candlestick reversal signal.

There goes BIDU...

I just posted on the intraday triangle in BIDU, looking for an upside breakout, the opposite of what technical traders would be expecting...

Volume is not huge (yet), but it should increase as BIDU runs an intraday head fake move to the upside.

BIDU Update

I've covered BIDU numerous times and what I believe is a large triangle top with a head fake move out side of the top, this sets up a high probability, low risk trade (short).

 The 5 day chart, a nice rally with a large triangle at the end, these triangle this big are almost never consolidations, but rather tops or if the preceding trend was down, bottoms.

 In yellow is the suspected head fake move out of the triangle, this tells longs that the triangle top is no longer in effect as a breakout, according to technical analysis dogma, nullifies the suspected top. However since the breakout, where is the follow through? BIDU has moved down a half a percent since the breakout, that's 3 trading weeks! From failed moves come fast moves, a move below the breakout area should set up a nice bull trap in the yellow box, that should snowball as longs take losses sending BIDU back inside the triangle and eventually breaking below the triangle.

 Intraday this small triangle (volume confirms) will look like a downside continuation triangle to technical traders, a break above the triangle will have them optimistic on BIDU and likely chasing a breakout as once again, a technical pattern seems to fail.

 The short term 3C chart seems to suggest some intraday accumulation inside the triangle for a break higher.

 The 60 min chart in BIDU has been negative for some time in the triangle and especially on the breakout.

Ideally I'd like to establish another longer term Put position in BIDU above $152, whether we can get there or not, I have no idea, it will largely be market and sector dependent, but I'll be looking for any strength to start adding to the position using the longest dated puts available.

Dont forget about XOM

My target area for XOM was $84.50 to look to start selling it short, it's about $1 away. Note the red arrow, this is what technical traders expected from XOM after it broke support, a failed test of resistance; this just isn't how the market works anymore. XOM has moved above the neckline resistance as we ALWAYS see (95% of the time?). I like XOM as a long term short position, if you like the trade idea which I updated yesterday and the original idea is also in that update, you may want to consider phasing in to the stock. If your portfolio size will allow for it (considering transaction costs), it is my preferred entry method with a stock like this.

As Europe Closes...

The dollar decline halts and starts moving laterally. This has been so predictable recently I could day trade off this 1 trend alone.

This should take some of the pressure off the market.

AAPL Update

 I've seen underlying action in AAPL warning there is a problem for quite some time, however AAPL is the biggest stock and among the top holdings for major hedge funds and others. This is a ship that is too large to turn on a dime, but turning I believe it is. RSI has shown problems in AAPL for some time as has 3C, but they are now growing more acute. When a stock makes a parabolic move like AAPL has, it usually doesn't hold. This may be a small H&S top, the important level is as always, a century mark at $600 or just below, that's just a human psychology thing.

As for the parabolic run...

Look at historical chart, MSFT before 2000 is a good example, when growth goes from strong and steady to straight up like a rocket, you won't find many charts that survive that move. It is an extreme in emotion and extremes in emotion are great set ups for Wall Street. AAPL may have reached its apex when Steve Jobs passed away, it may have reached its apex because battery technology just won't allow them to build more/smaller as the overheating I-pad 3 shows or like MSFT, they may have signaled their own demise in issuing a dividend, again, see MSFT price pre and post dividend announcement. Volume is light on the way up, not what you want to see, again, look at a 5-day chart of the S&P's rally from 2002-2007, volume should expand.

 This could also be a right angle broadening top, however all H&S tops start as a right angle broadening top. Whatever it is, it's sharp.

Yesterday AAPL ran over this positive divergence on the 1 min chart. My gut feeling was AAPL would underperform the market in this bounce, I didn't know it would be this bad. What this signals to me is an overwhelming supply of hedge funds trying to all squeeze out the door at once and they don't really care too much about not being able to do it in to higher prices. I think they know the market's time in this latest rally of the last several months i just about up and they are trying to move out of very large positions in AAPL very quickly. This positive 1 min divergence "should" hold as AAPL approaches a support level.

Here's the proof of funds moving out of AAPL

 The daily chart rarely goes negative in a stock this big

 Over the last week or so, a strong negative divergence confirming the trend down.

 The 5 min chart showing the same for much longer

 The 15 min chart

 The 30 min above and 60 min below don't need annotations, the divergence is clear.

When a fund like Third Point with $8.1 billion AUM has AAPL as a top 5 position 1 month and it disappears the next, a LOT of AAPL shares have been sold. No matter how much the AAPL longs love AAPL, without institutional support, AAPL could be in for a sharp revaluation.

I'm looking for any decent strength to get in to a longer term short position in AAPL, but barring that, I'd even take it right here-as a long term position.