Friday looked like a rotation in to TEch, my opinion was this was based in some part on gap filling as there are quite a few in Tech and the tech heavy Q's. This led to positions Friday in
AAPL calls as well as
TECL, the 3x Tech long (as short term trades) and it was the right call as Financials and Energy are both in the red and Tech is in the green with profits in the AAPL calls as well as the TECL longs.
*Remember though, these were always intended to be short term trades. Interestingly, as we have seen the last 2 weeks with 3C calling the market average that would rotate in the next day very consistently, we saw the same with Tech on Friday, these make for short trades (duration), but it's the market structure that has come unglued from the normal "Risk on" or "Risk off" when all the averages either moved up together or down together. Some might say this is healthy rotation, but rotation is between sectors, not averages (at least not to this degree) and it isn't a 1 day affair, it's a short term trend. This looks more like the market cracking up.
As for Tech...
XLK-Technology sector with the positive divergence, which was short in duration, the reason the trade ideas are also expected to be short in duration (but you have to take whatever the market is giving) and is already going negative on the price advance today, not so bad to turn things around just yet, but I don't like the volume I'm seeing in the sector.
XLK 5 min shows the head fake move with the QQQ last week as a point of interest, but the main point is that the 5 min chart is exactly in line short term so this tells us how strong the accumulation of Tech was on Friday, it didn't reach the 5 min chart for the sector-again the reason why I warned these trades were to be considered short in duration and the reason for choosing leveraged vehicles like 3x long tech, TECL and AAPL calls.
TECL 3x long Tech (long trade from Friday)
The accumulation out to 5 min on Friday and as it moves up today 3C turns flat.
AAPL's short term 2 min chart's positive divergence and then it turning more negative as price moves up today.
This 5 min positive in AAPL is much bigger than the chart above, this is why I chose Feb (monthly) Calls as I wasn't sure whether this would be a short term trade like what we saw in Tech or whether AAPL may add something more this week so I wanted the longer duration vehicle in case. I'm still undecided on that, but as you can see, the 5 min chart is still in good shape.
QQQ
QQQ 1 min positive Friday and that look I mentioned earlier with a leading negative divergence and price looking like its climbing a wall of worry.
The 2 min chart doing the exact same today
As well as the 3 min QQQ chart
And as you can see everything is in line at 5 min, no positive, no negative, just in line and I'm waiting to see what it does.
As far as where I'd like to be whether this is shortly after the TECL (Tech long) trade is over of whether it takes a little more time to set up, I want to be in TECS, the 3x leveraged short Technology ETF.
As for the longer term charts or the strategic picture, they are already set up-10 min with a head fake move to the downside
30 min positive leading
Even a 60 min positive with the 11/16 cycle lows at the green arrow.
I'll keep you informed on the positions in TECL and AAPL as well as anything else that pops up, I'll be looking to see if any other 1-day sector rotation sets up.
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