New Website Input

Since most of this is for you at this point, I'd like to ask one more time for your input so we can get this wrapped up and online. All of the critical functions and main pages are already in place, just like with anything else, it's the details that take the longest.

I'll give you an idea of what we have so far and what will be different.

Since the site will automatically handle all Paypal subscriptions (now if a new subscription comes through I have to send out the invitations, welcome email/information, email delivery sign up, etc. The new site will handle all of this) it will free up my time. We've been at capacity for a while and I'm actually not trying to encourage new members as I've already had to refund people trying to sign up because the Blogger site we are on now limits private sites, I literally have no space for them.

All current members will get instructions for the new site address and a coupon code, current members will stay at the current membership price, any new members after the new site is launched will pay a little more.

You'll have a lot more control over your preferences, any email address you  want to use will be fine, you'll be able to choose whether you want all posts delivered to you or if you only want certain categories such as trade ideas, or the daily wrap. Posts that are specifically about one subject like a trade, will be color coded in the header.

The new website will automatically refresh so if a new post comes out, you don't have to rely on your email or refreshing the site to know a new post is out.

There are several other member preferences you'll be able to set up and change, including your profile and/or passwords, etc.

The new site will look a bit different, but clean and easy to use.

I've had some people ask about being able to use credit cards outside of Paypal, we checked in to this and the price for recurring subscriptions is just way outside of our budget.

There have been several requests for text alerts for trades, I looked in to this as I'd need a third party service to do this and I figured out based on their pricing that if I sent every trade entry and exit for a typical recent week to every member it would cost about $300 a week and that's not including the site growing, it's also almost 10,000 more texts than they allow for 1 month.

The only way I can think of to do this is to offer the service as a side subscription if it is important to you, and then it becomes more practical, but if only 1 or 2 people wanted that and were willing to pay the extra monthly amount, it wouldn't be enough people to make it affordable, on the other hand if half of our members wanted it, it would be too expensive and run over their monthly limit so I'd either need to get some idea of how many people are interested in it, I'm just making a wild guess and thinking it might be $10 more a month (obviously depending on the number of people and package). Or, if anyone has alternative ideas beyond the color coded posts and the ability to receive them now in email format (you could choose to receive all posts or just trade ideas or any mix of the different categories).

However if anyone has alternative ideas, I'd love to hear them.

There are certain things I'm considering and these are really small details, but they are taking up a lot of time, like a risk management calculator.

Somethings we've looked at over and over and just can't find a good solution for, but I figured I'd ask one last time before we lock this down because I really need to get the details taken care of so we can get this up which will make my life easier and the service more user-friendly and customized for you and I won't have to keep sending refunds and long emails describing the situation for people who want to become new subscribers.

I'm hoping that within a year or less that the site will be able to sustain such functions as a 1-800 number instead of emails for important questions you have during the trading day, web or podcasts on certain topics or concepts that are interactive with members, I'd like to add someone else who does what I do, but perhaps is better than me in a specific field and yes, I really do mean it and want to have things like a discounted rate cruise for members and we can spend a couple of hours doing a seminar (I'd love to have some guest speakers and have talked so some really amazingly talented people who would be interested) or some live trading and then enjoy the rest of the day.

One bridge at a time though and the first is settling on the details and getting this on line, every week is getting more and more expensive.

Thanks for your input.


TIA

Market Charts and XLF P/L

First the XLF July $20 Put, you may recall I was considering skipping trading this leg to the downside altogether, there was something that wasn't sitting well with me and later I realized it was just the make-up of this week and then of course all of the events between today's close and Friday's open with most events catalyzing just before Friday's open including the NFP.

At first today when I saw the 3C charts in early timeframes moving up so quickly or strongly, even off the open they were strong, I wondered if perhaps the NFP had been leaked, I don't think that's the case, especially after seeing how quickly the same charts turned around, as I said when I first pointed it out, I believe it's a function of the lower volume, it tends to produce extreme moves in everything from price to indicators.

In any case, the UVXY position and XLF position were both meant to be short term positions, UVXY I closed yesterday and I think that was the perfect time...

The white arrow is UVXY (remember it was a Call option) yesterday, beautiful momentum, if I were watching price alone I'd have left it open, but 3C gave a clear signal there and it was closed for a +40% gain

If I held UVXY today, even selling early, I'd have lost a good part of that gain.

I DID NOT get a sell signal on the XLF Put yesterday so that stayed open and isn't it amazing that as the market was doing this today....

 The market was finishing the move started yesterday as expected, from last night's "Daily Wrap".

"This is today's NQ (NASDAQ 100 futures) intraday 1 min chart, it should be exceedingly cclear that there was a clear effort to move prices higher in to the close. I took that 1 step further (which I can't confirm until tomorrow) and guessed that Wednesday would close stronger than where we are now, "

So as the market tends to move together and Financials are a large part of that, "Why didn't I close the XLF Put?" Simply because there was no signal to do so.

This is how XLF performed today...

It came within 1 cent of yesterday's close, but didn't move higher like the rest of the market. The only reason I closed it was 1) it was meant to be a short term trade and 2) well you know what 2 is.

The P/L came down like this...

At the fill of $.62, the gain on the XLF put was +24%

It would have been better to close XLF the minute I saw leading positive divergences on the open this morning, but I was hoping to get a good signal by the end of the close today for Friday's action. If there's a lesson I'd take away from this it would be...

"Know why you are in the trade, know why you chose the tool you chose for the trade (XLF Puts rather than FAZ long) and know that the first two reasons are meant to work together and the gap down this morning is the perfect move for the choice of the trade, FAZ would have been a better choice to "Wait and See" through the close today."

Not a terrible error, but an error nonetheless.

As far as the market charts, in the first market update this morning , the post ended with this...

"I wouldn't say anything is conclusive yet, but I would say that all of the readings point more toward higher prices from here and all of them look much, much better than they could otherwise look if things were really falling apart early.

For now I wouldn't back away from yesterday's late (day) idea or thesis of market action (continuing the late day move higher), of course we may have to adjust, but I don't see anything yet that suggests that course of action isn't still the most likely, even with the less reliable a.m. trade data."

I told you in a afternoon update that charts were surprisingly strong, but that is in some part a function of lower liquidity and that I wouldn't take any of the signals to mean much. Also the parabolic move was noted in this post...

XLF Put to be Closed... Parabolic Moves End... Badly

Finally in the last market update of the day, this was the entire update...

"As I said, parabolic moves end badly. The strong signals in the market averages turned around and became just as strong on the downside (weaker market), but the move yesterday was finished and did what it was meant to do.

I'll get charts up, but this is exactly why I said I don't think anything that happens today will have much to do with Friday, if we had taken positions based on those signals 30 minutes ago, I'd be very nervous about them right now.

Patience is a choice, often a good one."

Here are several examples of how fast things turned late day.

 This is the DIA 1 min (backed up to 12:15 today) showing yesterday's negative divergence to the left and the late day positive divergence sending the market higher in to the close, this was not the typical 3:30 ramp, last night I showed you influential, market moving assets that had started this divergence as early as 1 p.m. yesterday so it did make sense that it continue today and in perfect harmony with the BULLISH SENTIMENT.

 Here's the same chart through the close, note how fast and deep the 1 min went negative

It wasn't just an intraday pullback as it migrated and very quickly, to the 2 min chart which is just as sharp of a negative divergence.

 It also migrated to the 3 min chart with a very deep leading negative divergence, now consider this happened in about 35 minutes, that's incredibly fast.

 The IWM was the only average that remained "In line"- 1 min

2 min

QQQ 2 min went negative sharply

Also migrated to the 3 min

And amazingly to the 5 min in such a short period.

SPY 1 min, these are very deep leading negatives for even a 1 min timeframe to develop this quickly. This is why I hoped to wait until we were closer to the EOD to close the XLF put, hoping it would drift lower.

SPY 2 min migration and a shrp leading negative

Even out to 5 mins.

ES 1 min went negative quickly.

The NASDAQ E-mini Futures went negative even faster and worse.

I'll have more for you once I see how credit's underlying trade behaved as well as the other assets we monitor.

For all intents and purposes, I'm totally flat for the next expected move as I was considering earlier in the week not to trade this one, luckily UVXY calls yesterday and XLF puts made some extra gains, but I feel better flat for this trend until Friday.

If you are off early, have a great holiday.

Last Market Update

As I said, parabolic moves end badly. The strong signals in the market averages turned around and became just as strong on the downside (weaker market), but the move yesterday was finished and did what it was meant to do.

I'll get charts up, but this is exactly why I said I don't think anything that happens today will have much to do with Friday, if we had taken positions based on those signals 30 minutes ago, I'd be very nervous about them right now.

Patience is a choice, often a good one.

XLF Put Closed- this was meant to be short term any way

Parabolic and TICK

 ES 1 min today

And the TICK chart which I keep telling everyone how valuable this boring indicator is, look at the trend change from +1000 to -500, that's valuable in confirming or even calling out a move early.

XLF Put to be Closed... Parabolic Moves End...

Badly.

This doesn't have anything to do with Friday in my view, it is the head fake we saw late yesterday just continuing, as I always say, "Wall Street doesn't do anything without a reason" and typically to change sentiment (which would be the reason for this move, you have to convince people.

That said, the XLF July $20 Put will be closed before the close today, hopefully the parabolic move will give some extra gains to XLF, but I don't want to wait too long.

Essentially I'd be pretty flat in to Friday, long / call positions that are there for the strong move up are still there, but I wouldn't add to those until I had more information Friday, from now until Friday it's a bet like Vegas, it's not an edge.

Quick Market Update

For the amount of uncertainty over the next few days, I'm impressed with the averages as well as the Index futures so far, they are in line or better and on some surprising timeframes, some 10 and 15 min, but I think that the movement on those timeframes is to be expected as the charts are a lot easier to move in a lower liquidity environment.

That isn't to take anything away from them, but in my view it's like taking an earnings position and not having any solid edge, I'd rather stick with current positions, very few for short term downside, a lot of core shorts, but those are further out and more short to intermediate timeframe longs as that is where the highest probabilities are and have been (this move down expected from the charts that started last Thursday was a much smaller divergence than the upside one in place).

Essentially the positioning is in line with the highest probability signals, there are more long call positions in place for a move up, a couple of short term short/put type positions in place, but much, much less and for the long term the equity positions are almost all short and doing well.

I like to have my positions aligned with probabilities  and there can be many different trends at once (short term down, intermediate strong up, Primary STRONG down). Not only are the positions aligned with those probabilities, but the types of trades are as well, shorter term trades have leverage, longer term (Primary) don't.

Trade Idea

I've talked about this for a long time, it isn't really logical to me (well in a few ways), but some of the best trades I've had were strong signals that made no sense, The $USD was one that was very strong while the $USD was very week and there was nothing in the news or fundamentals to suggest the $USD turn up, but I followed the signal and it turned up. Maybe 3 weeks after the turn the Treasury and F_E_D both came out within a week of each other talking about a "Strong Dollar Policy", smart money knew and all we knew was they knew something. If you waited to find out what it was, you missed the trade.

I'm seeing the same in TLT, I mention it now because it's not quite there, but closing in on "There" and if you agree with my assessment of the charts, then you may want to plan for it and make sure you have dry-powder available. I'd like to leverage the position up as well.

 TLT 4 hour, each divergence here took about 5 to 6 weeks to build, you get an idea of the downside move at 16 points, this is one of the reasons I want to leverage up the position, so far we have a positive roughly the same size, but I've been interested in TLT since long before it came down in Q2, in fact near the start of the year the odd trade was noticeable and stood out against the backdrop of the market's slow and steady m,melt-up.

30 min TLT chart is looking ready to go, it's a matter of positioning now...

The 10 min is showing TLT will pullback which is good considering I like it long.

The 2 min chart is sharper as it should be

And there's migration of this negative divergence through the timeframes including this 5 min and the 10 min above so it could be a decent pullback, but as soon as the short term charts start  going  positive, I want to be ready. I'd consider this a core position.

UVXY: Long EQUITY

We don't have much time left in the day, and as far as the market goes, I don't see much right now that really makes me want to take a position either way for Friday, I may revise this after seeing more data develop with the limited amount of time we have left, but I'm guessing Friday will likely open and hang around the Closing level of today assuming that all heck doesn't break lose in Egypt and don't forget the  Greek Deadline as well as the NFP, there's a lot of stuff coming up.

This position is an equity long for the very reason that the near term is so unpredictable, but in a timeframe that really counts and is along the lines of the timeframe that we have seen that has suggested a downside move in the market, this is a strong signal.

I would take an option position "IF" I could quantify the timing which I can't, not with all of these events that the market can't even discount.

However, as far as a 3x leveraged ETF (UVXY) I can withstand any short term drawdown if it comes to that and I don't have time decay and other stuff creating strong draw-down, but the biggest reason for the UVXY long is quite simply these charts.

Position size will be 2/3rds a full equity position.

 UVXY 15 min

UVXY 30 min

VXX 15 min

VXX 30 min

XIV which is the opposite or inverse of VXX and UVXY, 15 min

XIV 30 min

That's enough confirmation for me.

AUD/JPY

Well that didn't take long, EUR/JPY has already started a move, I think AUD/JPY will not be far behind.

Actually I just went to get the charts and AUD/JPY JUST started moving, it's still in a decent place and any little pullback would help.

The pairs don't give as good of a signal and never have so I look at the single currency futures as well.

USD/JPY broke $100, it may test that area, but I'm not interested in it right now, EUR/JPY already took off so AUD/JPY...

 The 1 min pair does have a slightly positive divergence, the price pattern is more interesting, it has put in the Process needed for a reversal.

 The $AUD single currency future from negative to positive and you get a rough idea of how big the move will be as well.

JPY 5 min leading negative.

Currency Update : AUD/JPY

I was asked about a couple of pairs and I know some of you like trading them, the one pair I saw that looks ready to move up is AUD/JPY.

I'll post charts of it in a few minutes, I just want to check some other JPY crosses.

Early Update: Can the market hold here?

Early action in the market is rarely reliable, but for now that's all we have.

Averages 1  & 2 min charts.

 DIA 1 min with a strong open and fading a bit

2 min still strong, added some strength early today

IWM strong open and moved to in line

IWM 2 min the same thing.

QQQ 1 min in line

QQQ 2 min is actually leading, but the trend is continuing from yesterday- it's really more the 3C trend that is inline.

SPY with a stronger than expected open and still leading

2 min strong open and in line

TICK chart trending up and now moving in to the +1000 area, pretty strong.

UVXY- Glad I closed the calls yesterday, doesn't look so good very near term.

2 min doesn't either.

I wouldn't say anything is conclusive yet, but I would say that all of the readings point more toward higher prices from here and all of them look much, much better than they could otherwise look if things were really falling apart early.

For now I wouldn't back away from yesterday's late idea or thesis of market action, of course we may have to adjust, but I don't see anything yet that suggests that course of action isn't still the most likely, even with the less reliable a.m. trade data.

What's Really Bothering You Mr. Market?

It seems that some overnight action is being blamed on events that have little to do with it, this normally wouldn't be important, but at this particular junction, it is important to know what the market is truly worried about.

Many believed overnight downside action in Futures was based on the "Example of True Austerity", Portugal where the resignation of what could ultimately be an entire party would force elections which would likely not go the Troika's way as I just posted yesterday the IMF admitted its mistake in thinking austerity can produce growth with Greece, it just produced more suffering so the best example of austerity, Portugal has felt the same pain, meaning new elections will likely see a new regime that is anti-austerity and therefore rejects the terms and conditions set out for the bailout package they currently have, meaning we would not have just 1 Greek situation, but two- one from a country that never stuck to any bailout terms and another who rigidly followed them.

Bond Yields in Portugal (10-year) spiked to 7.65%, contrast that with the average aide package loan at 3.2% interest. Spain and Italy also saw contagion with markets underperforming and yields shooting higher, but was this the reason for ES moving down overnight?

Take a look...

 ES overnight until 1 hour after the European open as ES bottomed there.

ES since 4 a.m. so the European news doesn't look like it drove ES at all, most of Europe was still sleeping when ES headed lower. 

The EUR/USD plunging is also being used as an example or proof of the Portuguese situation causing market turmoil.

Again the EUR/USD bottomed at the same time as ES, 4 a.m., an hour after Europe's open.

There's no doubt the market is concerned over Portugal, look at the bond yield spike, but that's the bond market, not ES.

On the other hand in Egypt we have the Military's deadline coming due in hours now, here's some of the overnight developments from Egypt...

"Egypt's military council is currently holding a crisis meeting which was joined by leading opposition figure Mohammed ElBaradei and religious leaders, military sources said on on Wednesday.

But the political wing of Egypt's ruling Muslim Brotherhood refused an invitation to meet the armed forces commander, military and party sources said.

"We do not go to invitations (meetings) with anyone. We have a president and that is it," said Waleed al-Haddad, a senior leader of the Freedom and Justice Party told Reuters.

The post on the official Facebook page of the Supreme Council of the Armed Forces (SCAF), headed by armed forces chief General Abdel Fattah al-Sisi, said: "We swear to God that we will sacrifice even our blood for Egypt and its people, to defend them against any terrorist, radical or fool."


The statement was issued three hours after Mursi gave a televised address to reject the ultimatum from Sisi.

The president also said he stood ready to “give my life” to defend constitutional legitimacy, echoing comments by a senior leader of the Muslim Brotherhood who urged supporters to be ready to sacrifice their lives to prevent a coup.

In the speech, which continued after more than 40 minutes, he admitted his first year in office had been difficult and he faced challenges from ‘corrupt remnants” of the old regime."

The Army will: Call for new elections, SUSPEND THE NEW CONSTITUTION and DISSOLVE PARLIAMENT 

In other words, the army will do exactly what I said last year and yesterday, purge any remnant of the "Democratically elected government, the President, the NEW constitution and any members of the Muslim Brotherhood in Parliament by removing all members because the only non MB members that are left in parliament are those the MB finds tolerable and thus the army does not as it reestablishes its 60 year reign over Egypt.

And the equity/asset proof of this...

The move in Crude since yesterday's close, USO is up over 2 %

So I think that establishes what the market is truly worried about, a fight between the MB and the Egyptian Army won't go well for the MB at first, but if they keep on it, back-up sympathizers will flow across the Sinai and a less conventional conflict will arise. I think the chances of this are very high.

This isn't to say that the market will not be in terror of the European situation soon enough...