Earnings

In a nutshell, the one that I'd have to take and have, MCP is doing well in AH up +6.34%.

The one that was a best guess and the trade I would not take, GRPN down over 16% in AH.

Not that I think the result is wrong because it wasn't a trade I would have taken as I said, but it was just recently that I liked AMZN, they missed and were down -12% in AH only to close up the next day in regular trade nearly +7% so I don't get too worked up about AH and PM.

Congrats to the MCP longs, lets hope it adds to that tomorrow and in the days and weeks ahead.

Market Close

At the close of the regular hours just moments ago, the S&P and NASDAQ E-mini futures still had a large leading positive divergence.

I'm going to take a look around at some other asset classes and earnings

Treasuries

Besides the Euro ETF being positive and the $USD ETF being negative, as I mentioned yesterday from the charts it looks like a high probability stop run in the EUR/USD, I also looked at Treasuries as they tend to be another good confirmation indicator.

Treasuries are a flight to safety trade, they'd be up on a day like today, but lets take a loom at the charts...

 Even on the fastest timeframe TLT (long dated treasuries) are not only negative, but there's no hint of a positive divergence sending them higher today, it's just a correlation effect.

 Broaden out the same chart to see if there was a positive divergence earlier that would explain it and there isn't, but there is a trend that is seen among other timeframes.

 The 2 min chart negative-this is a good example of a relative negative divergence as price is near the same level at the highs so you can make a "relative" comparison.

 3 min leading negative, note the trend around the 5th and the leading negative today.

 5 min with the same trend

15 min with the same trend.

What does this mean to me? Well first there's no positive divergence in Treasuries, a flight to safety trade and today there's no confirmation in them either, in fact they are negative which suggests they should see downside, being they trade opposite the market, that's why I put the charts up.

MCP

MCP is reporting tonight after the bell if I'm not mistaking, based on the recent charts I will be holding MCP.

 1 min

 2 min leading positive

 3 min leading positive

 5 min leading positive

10 min leading positive.

I just can't look at a signal like that and trade against it.

GRPN Earnings Follow Up

I showed you GRPN earlier today, they report tonight. What we look for in an earnings play in something way out of place as in the entire market is moving up and ha 3C confirmation and the stock in question is moving up with heavy distribution and leading negative divergences in most timeframes, then we know something is not right, we have a likely leak.

Lately we've been looking at a few and have had a lot of them right, but they weren't earning's plays based on leaks, they weren't even earnings plays, they were best guesses. These have been coming through pretty accurately lately, but it is more based on what I'd call conventional analysis than seeing a leak.

I don't like to play earnings at all, I never use to because you don't have an edge, it's a wild card that market perception can take either way no matter what the earnings are. We only started playing some when I did the quarter of earnings to show you there are leaks and we had something like 95% right, those were real leaks.

I don't think what I see in GRPN is a leak, but it is more positive than I'd expect. As with AMZN, don't go by the after hours or pre-market reaction, we called AMZN positive and it was down 12% in AH, but up 7% the next day in regular trade.

Really not much has changed since I showed you GRPN this morning, I personally wouldn't take the trade, but that's up to you.

 The 5 min shows a recent change in character, although so does price, but 3C is more positive than the change in price and this kind of flat area is where we usually see positive divergences.

The 15 min chart is what is interesting about GRPN. Based on this and best guess, I'd say GRPN reacts well to earnings tomorrow.

Futures

Both ES and NQ are adding to the leading positive divergence.

Futures Update (SPX/NASDAQ E-Mini)

The futures also gave a stronger signal more recently...

 ES 1 min (SPX)

NQ 1 min (NASDAQ)

This is the example I was trying to describe yesterday when we saw the 1 min intraday negative divergences, first that a "V" reversal is unlikely as it takes more time and second that price would come down somewhere around yesterday's low and allow the indicator to stay higher or put in a positive divergence, rarely do you see positive divergences or institutional buying in to higher prices, it's either in a flat range or falling prices.

Even though the divergence is leading, I use the white arrow to illustrate the "relative" positive divergence as price is lower and 3C is at the same level which is actually an improvement if price is lower, on other timeframes it's higher than yesterday.

Went with GOOG December $650 Calls

GOOG looks pretty interesting to me here timing wise

1 min leading positive near vertical.

GOOG Calls

From the GOOG post earlier today, as a hedge and a potentially decent trade, I'm going to open some GOOG December Calls (in the money).

Quick Market Update

I think we are very close to that intraday reversal, I looked at the currency charts and then some currency correlated assets and they all look like they are ready to turn form here.

MCP and AMD Update

With that divergence I pointed out in the Tech post as well as the IWM's very strong leading, I'm having trouble not pulling the trigger on an AMD add to.

In any case, here are the updates for both AMD and MCP.

 AMD's long term charts are what sold me on AMD long, but this 3 min chart's momentum is really something else and right where AMD is just below support. I have to look at what's available, how big the position is, etc before I make a decision on this, but if I were just looking at AMD, I wouldn't have any problem starting a long position here, albeit a little more speculative in size.

 We've looked at the volume/support breaks in AMD and these longer term charts don't look surprising at all, these are what I'd base the probabilities on, such as what happened on this 5 min after the support zone was broken.

 Or the 10 min

 Or even more clear, the 15 min. These are the types of signals I don't ignore.

MCP

 Speaking of a break of support and a divergence on the heavier volume-1 min

 1 min intraday is positive at the dip here.

 2 min is in a leading positive divergence, but this is a good example of how to look at a relative divergence, being relative between 2 points with price lower at the second and 3C moving up when confirmation should see it at a lower low.

 3 min MCP leading positive.

 5 min leading positive, I also marked the divergence at today's lows.

MCP 10 min is leading now, there's good migration in both averages.

Market Update

There's lots of bad news out there today from the ECB admitting a mistake in the collateral ratings of Spanish loans to the Trokia delaying the Greek bailout package they voted on yesterday for what could be, "weeks". With Draghi saying today in his press conference that the ECB is hesitant to activate the OMT bond buying program, Spanish Yields are seen moving much wider on the day with a 450 bp spread or the highest in 6 weeks. The OMT is useless as even a backstop if the ECB is going to come right out and virtually take its use off the table!

Nothing but bad news across Europe, yet the Euro hasn't made a new low since the 9:30 open so it's hanging in there somehow as the $AUD heads higher.

 Euro hasn't made a new low since the 9:30 a.m. US open.

 The $AUD has been heading higher.

Some leading indicators are also looking decent today:

 Commodities vs the SPX today are showing decent relative performance.

 High Yield Credit is surprisingly even moving higher.

 FCT is also moving higher intraday


 As is the $AUD

 Even the Euro is showing a little better recent relative performance recently.

 DIA 3 min is doing what I illustrated yesterday.

 As is the 15 min DIA chart, which is important (these are just some examples).

 The IWM is showing a very extreme leading positive 1 min after a positive divergence all morning, this is very interesting.

 The IWM 15 min leading positive positive is adding to a higher high.

 NASDAQ intraday futures in a leading positive divergence (Tech looks interesting as well.)

 QQQ 1 min

SPY 3 min also doing what I explained was likely to happen yesterday.

More updates coming as well as some ideas.

GOOG Follow Up

GOOG is already starting to move.

Here are the charts I promised.

 GOOG daily looks a lot like a head fake move with a shakeout below support.

 The daily chart tells you why I'm bearish GOOG long term and why I would use any price strength to short in to.

 However this 30 min chart didn't confirm the downside move, in fact it's about the right size for the range put in before the break below support.

 This 15 min chart is also leading positive at the break below support, further increasing the probabilities that the move below support was a head fake move and making it a low risk, high probability long at least for a little while.

 Near term the 1 min chart went positive with the market.


 The 2 and 3 min charts have been working on a positive divergence since yesterday

 The 5 min chart is at its first 3C higher high with a lower low in price for this trend.

This is my guestimate for a target, I now it's pretty large, but the point of the move is to shakeout shorts and the move itself determines how scared they are and how much needs to be done

Keep an eye on GOOG

I still have GOOG as a core short position and would love to add to it a bit more, but it's looking an awful lot like it's very close to popping higher. I even considered covering part of the existing short to add at higher levels, but that would tip the balance too far toward the long side and that's not where I see the larger probabilities.

If you are a nimble trader you might take a look at GOOG and what options you have available to you including options.

I'll get the charts up in a moment, but I really think it's that close that I put this out without charts to save time.

Market Update

If you recall how I described the most probable outcome yesterday in yesterday and today's consolidation sideways, that's basically what's .

I think we are very close to the market turning up here shortly as the timeframes on most of the averages from 1-5 mins are now positive, which is what we were looking for, positive 3C divergences in to lower prices.

Here's an example with ES, but most averages have most timeframes positive.