Final Update

Ok, the second part of the last update was it looked like an intraday move up, "Unless it was building for next week".

Obviously I can't be sure as things change fast and I would  rather see the EOD charts and Sunday.

My gut feel is that maybe we get an intraday move to the upside and it fails, there definitely looks like there's a failure in the market being set up, however my early gut feeling is this is to accumulate and to give bears confidence, as I said yesterday, I didn't think today was a day of much consequence, it wouldn't be until next week they can keep the emotional pressure on a short squeeze.

Some of the most important things I've found are in HYG, VXX and TLT.

HYG is being sold on 3C charts and in price now, however the 10/15 min charts that are where the next move has made it's home are very strong for this risk asset the market tends to move with.

VXX which moves opposite the market looks like ther could be a small intraday market bounce that is set to fail, this also could be stretched out to early next week, however in the timeframes where it counts for the move for next week, VXX is still looking like it's highest probability move will be down (market up).

TLT is setting up what looks to be a big move down for next week, this is market positive, but I think also specific to a longer term (long) TLT trade that would coincide with the final market dump.

So to put it in a neat box, timing looks unsure, but it looks fairly obvious that they are trying to create the effect of a market failure, perhaps an attempt (maybe today) to run up with a noticeable failure to give bears confidence. This is bigger than just today, I'm guessing it will play in to early next week.

So again, I wouldn't make any plans on longer term positions yet, I'm still not moving anything around, but I think (as they will never make it easy), they are setting up a fairly strong look of failure in the market. The important charts where the market short squeeze and moves like yesterday are residing (the last move of bearish and down was on 5 min charts) are on 10-15 min charts and that's where strength remains, in some cases grows.

Bottom line, psychological warfare is about to commence, don't get lost in it.
I have to get ready to get going, obviously I'll have another update out either later tonight or tomorrow.

Be patient, let them have their games, they only help us set new positions and don't fall victim to psychological games, as I said before all of this, "Pullback the red curtain and it's all psychological".

Hold on that last post for a few minutes

Wild Guess

From everything I've seen in the averages and Index futures, you know that time around 2-2:30 when most contracts are settled and the market can do what it  wants, it looks like it will rip to the upside.

If it doesn't, then it's storing energy for next week. I wouldn't make any longer term (next week) decisions based on afternoon and EOD trade, but that looks to be what is coming and very soon.

Intraday/Day traders may wish to use that information along with your indicators, otherwise I'll wait to see what the close and Sunday night/as well as Monday look like, still holding all positions (meaning if I didn't post it as closed, it's still open).

Sentiment Update

When you pullback the red curtain of the market, what you find is emotional tactics. The current sentiment on the Twitter-os-sphere is bearish,

""no buyers on $SPY... looks not good"

"who is everyone? I dont see anyone looking for pop here""

Any move initially to the upside isn't powered by buyers, yesterday wasn't, it's powered by shorts covering, it will be the same next week until we get to a sentiment swing and you'll be amazed at how fast it will swing, almost by the hour as they can't see more than an hour in front of their faces.

So far, so very good.

It's a lot like the bulls and bears saying yesterday's run was a non-starter because volume was low, "There are no buyers", EXACTLY, that has been the point since this was explained almost two weeks ago now, it has always been called a bear trap, but that is what moves price and changes sentiment and retail does all the work, Wall St. just executes the planning.

CMG P/L & Why

First lets get business out of the way, as I said earlier, "this isn't a trade I should be taking", I knew that, I told you that, it was more out of boredom and just for a little challenge to keep skills sharp, neither are good excuses for taking the trade even if it did make a profit. I did well in admitting the truth of the situation instead of making up some reason to justify my actions, I did horribly in making good use of being honest with yourself so I hope (as I tried to impress when the trade idea was offered), that I made that point clear to you and didn't set a bad example or rather did that you can learn from.

I don't know exactly how the parable goes, but something like, "An Army Captain is leading his soldiers when they stumble upon a field of land mines, the captain considers what to do with no engineers with their groups and decides he'll close his eyes and walk across the field and his men can follow in his foot steps, he makes it across the field unharmed". Obviously this is a ton of hyperbole, but the point it, what happens the next time the captain comes across a mine field? When you are rewarded for taking unjustifiable risks, it's more dangerous than had the trade failed. 

There's an ocean in between "What the highest probability is" and a "High probability trade", obviously we want the latter.

 At the fill of $7, the gain for CMG for 69 minutes of market exposure is 18.5%, very nice for an hour, but still not justified.

 I know you think I have "Head-Fake" on the brain, but there it is, it doesn't need to be big, the stops are automatically triggered as soon as price is a penny below the order, volume is up and even on this very short timeframe, this is an important reversal for this timeframe, that's why these head fake moves (when confirmed as such ) make such excellent entries.

Just from years of experience I could see the 3C momentum in the blue area was falling off, can you see it too?

Even though this isn't the correct version, the blue is often faster and it confirmed what I thought.

With the 5 min chart offering no positive divergence , I see no reason to hand around. There may be more intraday gains, but I don't know if the intraday pullback will make the options worth any more and I have to consider my time, I don't have much today, we all have to consider our circumstances in choosing and managing a position.

You could have also used simple momentum indicators, these below on a 1 min chart show where CMG went positive today and negative.

At the top, Momentum, then RSI, MACD (26/52/9), then Stochastics (50).

I', likely going to spend my remaining time just checking on the health of the market, making sure nothing is developing that will reach out to next week.

That being said, around 2:30, most contracts are settled and the market tends to get more volatile, this doesn't necessarily mean anything as far as next week and the bigger picture go.

Closing CMG-I wasn't kidding

ES Update

This Es chart should help get things moving...

Es 1 min leading positive.

I don't mind holding FSLR over the weekend, but as mentioned earlier, CMG was intended to be a shorter term trade, if I see good momentum and 3C start to go south, I'll likely close it down at a gain.

Going with Some FSLR Calls- July $45

I was just talking a few days ago about trading this stock many years ago and how volatile it was.

In any case, I'll open the position as soon as I post this.

Here are the charts. As you know I have to leave early today to be with my mother at a doctor's appointment with a long needle, but this is a position I don't mind holding over the weekend.

 Whenever there''s an obvious range on any timeframe, it usually gets run, the question is, "What did 3C do?" The point is, there's a little suport below that may be tested before it becomes a really high probability position, I don't have time to wait and don't think I'll get any significant consideration for doing so.

The 1 min chart is looking good

The 3 min is as well

The 5 min where it really starts to count...

And the 10 min, this is inline with my current market view which hasn't changed, that would mean at some point this stock goes down hard with the rest...

The 60 min chart is the chart that shows that, but we should have plenty of time to make some decent money, I think this is even a decent long equity trade without leverage.

Market Update

It's a very typical Op-ex pin-type day, just like the overnight session with a series of small corrections, ES was held in a tightening range that looked like a triangle pre-market. The same is happening in the averages. In some way it seems the USD/JPY is contributing, it hasn't moved up yet, but has a positive divegrence intraday to do so, that would tell you the level of coordination in manipulating this market, but of course most of these big Wall St. houses trade currencies along with everything else.

SPY recent positive divergence and the range it seems to be holding in.

ES as seen pre-market had a series of these little adjustments in 3C to form the tight range, here you can see Es has the same signal as does the USD/JPY.

Op-eX must be very profitable, with roughly 90% of all options expiring worthless, the juice is definitely on the "writing them" side, especially if you can pin the market on op-ex.

CMG

I looked at this for a member, I'll be honest, this is kind of more of a "something to do trade", it's not a good reason to be trading at all, I'm aware of that, I'm making you aware of that.

I'm going to try some June 22 $365 calls for a day trade, I can see this going up AND CMG1322F365reversing today, so THIS IS VERY SPECULATIVE, I'M THINKING A VERY SMALL POSITION.

VXX P/L & Charts

I warned yesterday about considering taking profits in VXX, this is already a volatile asset with the percentage moves for this week at -1.37%, +6.60%, +5.89%, -4.62% and +1.04% so far today, add to that leverage of options and gains come and go quickly.

Generally speaking, if you know VXX is likely to go down, you know the market is likely to go up and vice-versa, if VXX is likely to do nothing with the market, then you are just watching profits erode through time decay.

This was a silly mistake on my part not to have closed it earlier, its still a profitable position, but much less so than it could have been had I closed it yesterday at the close.

 VXX 5 min from yesterday's negative divergence to today's positive divergence, that's good enough to shut down an option designed to be played as a "Hit and Run" position, some of the others I have no problem leaving open until next week, but the volatility in this one doesn't make it worthwhile.

The same timeframe in the SPY gives general confirmation, you can see the negative divergence at the top is very small and a relative divergence which is the weakest, thus I'm not concerned for other positions in general.

The P/L could have been a lot better, this print out below is as of today, yesterday's at the close would have been higher.

At the $ 2.94 fill this a.m., the P/L is 15.3% instead of 23.4% from just 15 minutes earlier. This is one of the problems with putting a real $ model portfolio which I'd like to do, there are a lot of other problems/complications as well, but being distracted costs money, sometimes a lot.

Real quick I just want to share a quick story many of you have heard, but it's a good reminder and some have not heard it. I literally don't remember the last time I used a limit order for anything, it may have been this time which I think was about 10 years ago.

I went on vacation, I use to always preach, "If you are distracted or on vacation, close your positions", if for no other reason than to enjoy your vacation. I had one position I liked a lot and though it would take off, the market was no where near this volatile so I put in an emergency stop, the kind that is about twice as low as you might normally place it just to be sure I wasn't knocked out on a silly intraday move. Then on vacation the market took the stock down to my stop, hit it and then went on to close up something insane like 5-10% and kept going as I expected. The low of the day, my stop. Everything you put on the books, no matter what your broker may say, is seen by someone, I keep everything mental now.

Closing down the VXX put

Should have done it earlier.

Early Update

Just keeping contact here, today thus far is exactly as I envisioned it yesterday, based on past experience after most of the option contracts are closed around 2:30, the market acts up, otherwise it stays in a pinned range.

I see some inrtraday pullbacks coming, they are not unexpected, they aren't anything I'm concerned about at all right now. The $USD/JPY as expected has lost steam and has a stronger 3C negative divergence so it will probably pullback and take the market with it to some degree.


I'm still looking, but so far this is exactly what I expected for today.

Pretty Blah

Japan started ugly and rolled out of a nose dive, not much else of interest happened overnight, sure there were some things like China failing to withdraw liquidity from the system, the Syrian Chemical weapon situation, but nothing I see that is immediately effecting anything.

We had a higher PPI reading than expected in the US, I don't think that effects much.

Al of the Index Futures are trading in a tight lateral triangle, there's a look to them that they break to the upside early, but I don't think the USD.JPY holds out much longer so my guess is on balance, today is pretty blah.

We'll see soon enough.

 ES is an almost perfectly MADE triangle...

USD/JPY should be supporting risk, but it looks like the USD falls soon and the Yen rises intraday.