EXAMPLE: XOM

Here's an example of why this is a tough call, tough area. First as we saw earlier today when we forecasted a market pullback intraday at 11:30 a.m. that was based on a new intraday divergence, all new divergences, even an intraday pullback, will start with the fastest (weakest) timeframe and if they are strong enough they will build from there.

Here's the chart of the IWM which was the most extreme 1 min negative forecasting a pullback this a.m.

 IWM 1 min this morning. The signal gave us nearly 45 minutes notice that a change was coming, we didn't have to guess if the market was going up or down, we had a good idea and when as well.

This chart would have a lot of work and time to undertake destroying a longer term divergence that is pointing to a bounce.

This is what the IWM closed like on the 1 min chart.

The clear negative caused more of a range than a pullback, but 3C didn't make lower lows with price so it went to a relative positive divergence, this isn't strong, but it is a new divergence suggesting the start of a new trend and that the intraday pullback was ending, at least today's.


Yesterday I closed half of the XOM calls, it was a great decision as XOM has gapped down today and spent the rest of the day moving down, but I didn't close the entire position because I saw a pullback today in XOM as highly likely and the position is still in the green just in case it didn't pullback today , but tomorrow instead.

So like the market today which we called for a pullback around noon time (which should see accumulation in to that pullback), XOM has done something similar and while each average and stock look a little different, THAT'S WHY I'M NOT HITTING EVERYTHING I LIKE, BUT ONLY CERTAIN ONES NOW, the XOM example is a fair way to illustrate why this is such a difficult timing call right now going in to op-ex pin Friday and an extended 3-day weekend.

 XOM going negative on a 2 min chart yesterday was reason enough to take half the gains off the table

However as XOM pulled back today as expected yesterday it went from in line or trend confirmation to a relative positive divergence. A relative divergence on a 1 or 2 min chart is the weakest signal you can have, but the point is, ALL SIGNALS START HERE. If the signal is strong enough it will move to longer charts and put in leading divergences.

 The slight strength on the 2 min chart above came from this 1 min chart of XOM today, at first it was moving down with the market and in line at the green arrow, then it started making higher lows and putting in a positive divergence, it was just strong enough to move to the 2 min chart as you saw above.

This is the start of a new signal telling us the pullback in XOM is being accumulated, it's likely going to be a good buy and it's likely going to end (the pullback) soon.

Even the 3 min chart picked up activity and was showing a positive near the EOD when professional traders come out.

This 15 min leading positive is not going to be undone easily and it tells us to trade XOM (short term) from the long side, pullbacks that have accumulation are excellent entry points.

Many of the market averages changed quickly 2 days ago, literally in minutes so it's difficult to tell how long they'll take to move, but many averages that were pulling back today started flashing positive signals and I don't think we will visit the "W" lows again, in fact the bull flag I showed earlier looks to be real. More shortly.