Positions...

I didn't go crazy just adding positions that were "Risk On", I only added positions in which the 3C charts met my criteria for a high probability/low risk position.

If I were the invisible hand behind the market, there are a couple of areas I'd be shooting for intraday to give some head fake momentum. For those who haven't read my two posts on "Head-Fake" moves and especially the reasons why, here they are...

Part 1 "Understanding the Head-Fake Move...How Technical Analysis Went From an Asset to a Trap"

Part 2 "Understanding the Head-Fake Move...Motivation"

These are linked at the top right of the member's site under the heading, "Get the Most Out of Your Experience" and they are the first two links. While I think reading both articles is necessary to really understand the who, what, where and why, the second part, "Motivation" is more on point as to why this would be useful in moving the market higher.

 If the SPY is moved down just a bit less than 1% intraday, more than 6 weeks of longs would be at a loss, that would trigger massive selling, there would be tons of supply at good prices. Today's intraday range was 1.3% so it's not a stretch (that intraday range doesn't count the gap, just the high to low).

 It would also be effective to break the 50-day moving average, even if just intraday on a head fake move, the resulting stop-loss orders would again create volume and lower prices which are the two things institutional money needs to take positions.

 Here's the QQQ daily chart with a 50-day moving average.


Look at the volume on end of day stop-loss orders just from the QQQ losing the daily 50-bar moving average by $.01, lots of supply, lower prices.

We are use to the way we trade, if we want to buy 100 shares or 1000 shares, we do it and at most we get a crummy fill as the bid/ask spread is maybe $.05 or $.08, but institutional orders are in the millions, try to execute one of those all at once and see what happens to the fill, so they need to do this in parts, that's why a reversal is a process, not an event and that's why stops or limit orders are hit so often, they create the volume needed (no one asks or cares who took the other side of the trade when stops get hit, but if there's an order just out of no where for several hundred thousand shares that moves price significantly and everyone thinks SMART MONEY IS BUYING and rushes in). So, for smart money it's a lot more advantageous to hit the stops, have the liquidity needed and get the shares at a better price.

As far as where the stops are, read the first part of my 2-part "Head-Fake" article, "How Technical Analysis Went From an Asset to a Trap".

The stops are at the previous lows, closes, 50 and 200 day moving averages, just about any whole number like $150.00 (Why do you think every retail store marks the price as 149.99? It's because the human mind is attracted to whole numbers).

In any case, I'm just saying, "If it were me", as far as what I was looking for as the minimum, we got the "W" bottom and there are plenty of leading indicators that are in line and ready to go. The currencies look good where they are as well.

I'm going to talk to my wife on Skype (as you know she is in Europe for medical care) for about an hour and then I'll post the Leading Indicators and the Daily Wrap as well as post some of the assets I mentioned I'd get to like AAPL, GLD, UNG, etc. If you think of any others (I have more in mind) and if I find something interesting, I'll post those as well.

So far so good, I told you this was going to be an interesting and fun week. Remember my GS short call / position last week? That's already up +6% with no leverage and one of our members decided to use options instead and cashed them in today for a 300% gain!

See you soon.