Market Wrap

There were quite a few stories today from CAT's abysmal earnings and near +3% close to the symmetry in the market averages, well most of them to the NFLX move, one which I alluded to earlier as a larger trade as the longer term NFLX doesn't look as good as you might think.

Gold had it's best day in 3 months and best week in 18 months, we were positioned perfectly for that move and I believe in the days ahead we will see even greater gains. While I mentioned the market looked like it could pullback tomorrow, maybe the first half of the day or perhaps consolidate, AAPL's charts are looking very strong, if AAPL earnings are anything like the reaction to poor CAT earnings and not as good as you might think NFLX earnings, than we are most likely off to the races, cashing in on positions set up last week and starting new ones in advance of the next move which should be a doozy.

While I didn't know what the larger/longer term problems were with NFLX when asked earlier today, I did think NFLX would break north of $200 and this is the area of our sweet spot. As NFLX's earnings were digested, the problems that I saw on the longer term charts were specifically named, I suggest you read this article...

Does Netflix' $3.4 Billion Off-Balance Sheet Liability Make It A "House Of Cards"?

As to tonight's after hours move, a short squeeze in the less liquid trade of after hours and the reason I don't pay too much attention to that trade for analytical purposes.

We'll look at NFLX in greater detail as it sets up, but for now, here's a quick look at the longer term problems...

You can see exactly why I suspected prices would move above $200, but this hourly chart also shows trouble brewing, NFLX may not be quite ready yet, but it is moving in that direction and today's gains will only hasten that move.

Late day action in Credit, Yields and commodities as well as other Leading Indicators seemed to confirm the charts that lead me to believe we see some softness in the market, most likely during the first half of the day.

SPY charts as to tomorrow's action...

 

 The 3 min intraday chart as it was deteriorating intraday most of the afternoon as I had warned several times, but...

None of that weakness made its way to the 5 min chart, essentially the divide between intraday action and the start of institutional signals.

The most dominant P/V relationships were Price Up/ Volume Down which often results in a one day overbought condition with the next day closing down, however we'll see how the market reacts in to the run up to AAPL's earnings and then of course on Wednesday.

Index futures tonight are on the same course that the 3 min short term SPY chart above had set by the close and are leaking off gradually right now.

AAPL's charts as well as GLD's still look outstanding, what does someone know about AAPL that we don't yet? However as mentioned today, we may see some consolidation in gold after such performance, yet it looks like it still has a full tank of gas to move forward in coming days.

I trust these charts need no annotation, my ugly drawings would just take away from their beauty.

 AAPL

GLD

We may even see another opportunity in silver as something has been brewing over there.

There is very short term $USD strength/positive divergences and Euro weakness, yet this is very short term, the $USD should see downside in the next day or so with the Euro rallying, a market positive environment, however for now that is causing EUR/USD weakness which is risk negative/market headwinds, it shouldn't last long though.

Additionally the $AUD is seeing some weakness and the Yen some strength, this is also a market negative right now, however once again the longer term positives in the $AUD suggest it will come back and offer the market support so futures, FX, leading indicators and the market averages all show 3C charts suggesting near term weakness or consolidation followed by a larger, strong move to the upside, we may find some short term trading opportunities in this environment tomorrow and we'll be watching for them.

Don't forget about UNG as well, this is a great opportunity we have, it may be the last before a stage 2 breakout.

In any case, there's nothing too concerning to me at all, it looks like the charts that matter are still very much where they need to be, just remember that any short term price strength over coming days is a means to a larger, higher probability trade in which we take profits from our longs and set up our new or add-to short positions.

All in all, we have some great signals, just look at gold and you know how I hate to trade precious metals!

Have a good night, tomorrow is another day full of opportunities.