Weekend

I'm going to give my eyes and mind a break and look at the market over the weekend, but there are plenty of signals and signs that the bounce is still on and the move up earlier this week wasn't the kind of bounce I'm talking about.

I left all Calls, GOOG, FSLR, XLF, XOM, URRE, MCP open, I think they'll have plenty of time to benefit from a strong bounce.

The real prize though continues to be to short in to that bounce or take profits in to it. It may look like price is considering another run to the upside, but all of the indications and charts say the market and we are lucky just to get a bounce, even at the Jackson Hole Symposium today a speaker compared this market's ability to have the bottom fall out with that of the Crash of 1929, I think it would be worse.

Have a great weekend, you'll be hearing from me soon.

DUST Addendum

I forgot to add...

Looking at price only, the base since the 16th is very proportionate within the cycle, this is something I look for because "V" shaped reversals are very rare.

DUST

DUST is the 3x short Gold Miners or GDX, NUGT is the 3x long gold miners or GDX.

I mentioned the other night I wish I had taken out a DUST long over a GDX put, I saw the AQG position falling apart very quickly and when you see 1 and 2 min charts move quickly when there's already been an accumulation period, I've found a lot of times that happens just before a move and I'm convinced it's market makers or specialists loading up their account for a ,move they know is coming because they filled it. Market Makers and Specialists facilitate a smooth market by being the buyer/seller of last resort, but about 30% of the activity in any given stock before HFTs ruled, was the market maker/specialist trading their own account. I suppose HFTs would do the same if they uncovered an "Iceberg", that's a large order they uncover by pinging the market looking for the tip above water, as you know the larger order is below the waterline and not visible, that's why market makers and specialists get paid to fill orders, they can do it discreetly.

As an aside, the recent market/ Precious metals correlation seems to be inverse as in, "Market up, PMs down" and vice-versa.

 The large 15 min is already there, the work is already done.

It's the intraday 1 min popping up hard and SLV popping down low.

There are a number of small divergences in this 2 min trend stretching over weeks, but look at the move today,

This is why I want in DUST today, but just can't get execution.

AAPL Prepping for a move higher?

We're missing a lot of data so I have to stick with charts I can trust, but late day action looks like accumulation and the QQQ's 3C charts could use some help, they look the worst by far.

 1 min afternoon accumulation

2 min

5 MIN IS AS FAR AS I DARE GO HERE.

However the 15 min might be long enough to skip over the loss of data, it would be largely in line with most other risk assets positive at 15 minutes.

AGQ / DUST Update

Still having trouble getting AGQ long to execute, if I can close the AQG 2x silver long, I'll be opening a DUST long (3x short gold miners) with the proceeds.

AGQ Position

I'm trying desperately to close an old AGQ (2x long Silver) long in, but I'm having trouble getting the order to go through.  The position is up about +8% and I want to dump it here and now.

The Magical Hour

Due to the number of weekly options now trading, every Friday turns out to be an options expiration pin as you saw today with the market barely moving and often closing Thursday very close to the pin for minimal percentage moves on Friday, except in to the last 1 to 2 hours as most options contracts are cleaned up, then the market starts moving and it doesn't have to have anything to do with real direction, it can be a head fake move, it can do a lot of things, but it's generally not that important except for the 3C signals near the close, they tend to pick up where they left off on Monday (the next trading day).

Here's what we have

 SPY Ascending Triangle today (Bullish technical price pattern).

SPY 1 min intraday chart

SPY 5 min intraday chart, these suggest weakness in to the new week, perhaps early Monday or all of Monday.

I'll remind you that we pretty much only had 1 or 2 min negatives yesterday afternoon, the rest up to 5 min. developed today, so they can easily be undone in half a day as well.

The 10 min and certainly the 15 min SPY charts have seen no damage and are still leading positive and look very strong.

 Remember the VXX should give the opposite signal of the SPY to confirm as they move inversely? Here's the VXX 1 min , it's leading even higher now, this is why I took the chance on the VXX call position.

VXX positive to 5 min and then at 10 mins.

It falls apart, again confirming the strength of the 10-15 min positive SPY and other averages.

DIA in a tight bullish ascending triangle.

DIA 5 min intraday negative.

IWM in a sym. triangle

IWM 1 min negative, but not that bad.

That's about where we stand, unless something dramatic changes between now and the close, I'd expect weakness in to the close and likely Monday early on, however the 10-15 min charts and even 30 and 60 min in HY Credit are VERY strong so I have little doubt a downside move this afternoon or in to Monday will be nothing more than noise, but may be good for some trades.

Going With Speculative VXX September $14 Call

This is a very speculative position and likely VERY short term

VXX / UVXY VERY Short term (speculative) long position

As you know I showed the averages with negatives from 1 to 5 mins. VXX and UVXY to confirm would show positive divergences in the same timeframe, it also makes VXX or UVXY long a pretty decent position, but a fast trade, likely over Monday, maybe even late today although I doubt that.

 VXX 1 min

VXX 2 min

VXX 5 min

And it stops and goes negative confirming the SPY at 10 mins.

UNG Update

I was just flipping through some charts and I think UNG will pullback to fill a gap, for me as a longer term equity core position it doesn't matter, but for someone in a call position it probably does,

The $18.10 area is the target, I don't think the long signal will be lost, but I do think a pullback to fill gaps is likely.

Leading Indicators

So far Leading Indicators are not really jumping out accept in one area and it may be the most important, Credit.

First lets look at the others (all leading indicators are compared to the SPX in green unless otherwise noted).

 First commodity weakness yesterday has flipped to commodity strength, commodities are risk assets and despite their plunge over the last year plus on weakening global economics, they still should show some interest in a risk on move. Today's turn up has other elements to account for, but it may be part of a leading signal of an impending move to the upside.

This is commodities vs the $USD in green, commodities and the $USD typically have an inverse relationship, if one is up, the other is down so I inverted the $USD's price scale, this way if commodities and the $USD are tracking together we know commodities are moving because of the $USD and the correlation, however commodities shot higher today well above that correlation again, perhaps an early leading indication of a risk on move.

 FCT as a sentiment indicator (back to the SPX) was extremely weak yesterday AFTER the NASDAQ went down, I don't know how much that impacted the fund, but today we have a flat range which is not a positive leading indication, it is a vast improvement over yesterday.

 Our second sentiment indicator HIO us making higher highs today vs the SPX which is making few, this is a stronger positive signal.

Now the important stuff, CREDIT...

 Junk credit is High Yield by the nature of its risk, but it trades a lot like High Yield Corporate Credit, the fact it's leading the SPX and very similar to HYG is notable, both made abrupt "V" reversals that I was not comfortable with, but since HYG has filled out a more appropriate base and leading positive divergences to 60 mins.

 Here's HYG, note the reversal data of the 20th, it's also leading the SPX, "Credit leads, equities follow".

Now look at the difference in my custom TICK chart right around the 20th

The 20th is where the white line is, there's a vast improvement in the TICK data since.

In addition to the positive divergences and the size now of the base which is much more respectable, these HYG 3C charts say a LOT 

 HYG 10 min built a base after the ugly "V" reversal and is leading positive.

Very few (I can't recall any at the moment) risk assets have a leading 30 min positive like this which is now moving...

over to a 60 min chart.

In other words, HYG looks well supported and HYG can support the market upside very well.

Market Update

These Friday Op-Ex pin markets are really starting to get annoying.

In any case, what we seem to have is some intraday (mostly 1-5 min) charts that are negative or in line to varying degrees in the averages with strong 10-15 min charts, typically if there's underlying strength built up and the market needs to be held back for something like an options expiration pin, typically we'd see stronger intraday charts like a 3 min, etc to hold back a 15 min leading positive. Clearly I think today could be considered, with the SPY trading in a VERY narrow range, that also happens to be forming an ascending (bullish) triangle that most Technical traders would expect to break to the upside, an options expiration pin.

However, back to that triangle, technical analysis teaches it should break to the upside, so perhaps these 1, 2, 3 and 5 min negatives are telling us there's going to be a break to the downside, I would expect this to be a head fake move because the 10 and 15 min charts are so strong.

There's the triangle to the far right, it should break soon.

Examples...

 DIA 2 min is negative from late yesterday as we knew, but hasn't done anything to move "in line" today so it's still negative.

IWM 5 min is negative from a former in line status, either this is being used to pin the market or we are likely going to see a head fake move around that triangle as most contracts are wrapped up around 2 p.m. or so.

The Q's 1 min look positive, but it's hard to judge as there's so much data missing from yesterday.

SPY 1 min was negative yesterday, that's why I said early trade would be negative today, but it remains negative and getting worse, still only a 1 min intraday though.

 SPY 2 and 3 are negative as well as this 5 min.

At 10 and 15 min in SPY and just about every other average they are very strong positive
 

The TICK today vs yesterday is VERY tame, like an options expiration pin would be.

However look at my custom TICK vs the SPX and note how TICK has gone from very negative to transitioning to positive and at what would be the second low where I said SPY NEEDED to go to build support, it's VERY positive.

HYG looks the exact same as SPY, short term negative, but 10-15 min VERY positive and HAS EVEN ADDED TO THE 30/60 MIN LEADING POSITIVE DIVEGRENCES TODAY.

My gut feeling is that this market is going higher, bounce or whatever you want to call it, BUT THEY AREN'T GOING TO GIVE IT AWAT FOR FREE, THEY ARE GOING TO MAKE YOU WORK FOR IT.

I'm guessing a downside shakeout would be the "Work for it part"

We'll keep tracking and seeing where opportunities pop up.

MCP Follow Up

The MCP September $6 call is in the green and so long as we don't form a double bottom (which I think would be too large of a base/too large of a bounce), MCP has a beautiful bottom in place and divergences that show it did pick up strength (like XOM) around the 15th/16th of late last week when bounce signals first started coming in, but the strength of MCP signals show it is clearly a stock that can stand on its own two feet rather than just drafting the market.

 Intraday 1 min perfectly in line in the rounding base.

2 min trend picks up strength almost the same time as nearly every other asset, starting around 8/15 or 8/16 with a nice rounding base and leading positive divergence, this is the clean kind of chart I really like.

 Like many of the stronger assets, the 15 min chart is leading positive, but unlike most that stop at the 15 min chart...

The 30 min is leading positive

And even the 60 min is leading positive.

Usually I'd have taken the gains from GOOG and MCP and been on to something else, but these just look like there's so much more upside potential that we haven't even begun to realize, especially for MCP in particular.

Closing XOM Short and Opening XOM Sept $85 Call

I will come back to XOM as a core short position, but I think it can be had at better prices as much as  I hate to close any short at a time like this, XOM just looks due for a correction, it seems to have gained strength from around the same time as the overall market, starting around the 16th.

This does not appear to be an Energy sector move in itself other than the general bounce Energy should see with the broad market, XOM looks to be further out than that, for instance the divergences in the Bull Energy 3x ERX are not there like XOM's.

I will be looking to return yo XOM as a core short, just at higher prices.

 XOM 15 min chart with a sharp leading positive divergence, this 15 min chart tends to lend more credibility to a bounce above and beyond yesterday's action, I think that's just a start of a start.

XOM is oversold as well, for Wall St. to renew this trade they'll have to bounce it.

 XOM intraday was perfectly in line and now positive.

ERX the bullish 3x energy ETF shows a 3 min positive divergence so it should bounce overall with the broad market, but...

At 15 mins, there's nothing at all like XOM or the rest of the market.

For that matter, the Energy Sector, XLE is very similar.

No 15 min positive or leading positive divegrence, this appears to be contained more specifically to XOM.