Opening Indications

Yesterday's EOD Market Update said the following,

"I've looked around quite a bit, I still have more looking to do, but I've decided (especially with an op-ex pin tomorrow) that I don't see a decent swing trade, the only reason I took the options trades was because they were strong signals I felt good about. I feel like taking a trade right now is just trying to keep a streak alive or be a busy body and try to force something to happen and that's no reason to enter a trade.

SPY 5 min, there's a divegrence there, but it's not screaming "Buy" to me and there's what looks like the start of a reversal process...the best thing that probably can be said about today if you are interested in playing a long is that most of the averages caught down to the double bottom area...

QQQ 10 min is interesting, but not for me yet, I think the best place for a reversal process is under the trendline on a head fake move...again, below the trendline is really the best place for these to carry out a basing process so I'll be patient and wait for the screaming set up".

After an ugly overnight in Asia and Europe (with the "Flight to Safety Trade" on, German Bunds yielding a 10 month low below 1.5%)...

ES going negative and losing ground right around the European open...

the U.S. gets its gap down as well, but this is interesting in light of what my feelings were yesterday based on the charts to some degree, but based on our concepts that come from the charts in large degree (more market psychology and behavior)...

 This is the Feb cycle, ALL averages are now in stage 4, but for near term trade as mentioned yesterday, the move below recent trendline support looks to be the defining feature going in to next week.

Don't forget even though its weeklies, today is still an op-ex day and we still see the Max-Pain pin until the 2 p.m. area, that's when we get our best signals for the next week from 3C as price will do whatever it wants, but 3C will give signals that almost ALWAYS pick up where they left off on the next trading day, even over a weekend on Monday.

 As far as my comments from above, there's still a "W" pattern, but unlike the textbook "W" or Double Bottom that you'll find in the Holy Grail of technical trading,"Technical Analysis of Stock Trends", we have found that these concepts that are followed sp predictably by Technical Traders have been altered by Wall St. just enough to use these predictable price formations against them. For instance, what could or should have been support now looks like a lower low when in reality most of the time this is a head fake move that hits stops and knocks out longs and sucks in shorts to later knock them out when price moves back above the former support line.

This is why I said yesterday, "The best place for a reversal process to occur is under the trendline" as it is also effecting a head fake move that creates the kind of supply larger institutional money needs to accumulate their large positions.

 Thus far on the open, that concept "seems" to be on target (or it could be the op-ex pin or both), note the positive divergence on the gap down.

ALSO NOTE THE VERY SMALL MOVEMENT, NOT WORTH THE RISK OF AN OPTIONS TRADE AT ALL IN MY VIEW.

 This would be a 3 min SPY chart of the second bottom, the head fake, lower low. There are signs of accumulation thus a reversal process becomes more likely and we have to start looking at the possibility of the "W" formation being legitimate which would set up some nice swing-type trades.

This is the 5 min SPY, we do have accumulation at both bottoms of the "W" pattern with a head fake late in the pattern as is the case about 80+% of the time before a trend reversal (from down to sideways to up).

 The IWM also confirmed with a positive divergence on the gap down this morning...

As did the QQQ.

One nice thing about the overnight Asian weakness is it may be kick-starting our FXP long position which I'm excited about, it's up +3+% this morning.

Also JPM missed earnings on top and bottom lines, that is one of our core shorts and it's down -3+% this morning.

I'll be keeping a close eye on the NASDAQ Biotech Index, I saw some things I liked yesterday, but it wasn't quite there.

AHHH HAAA HAA ... NEWS OUT THIS MORNING THAT BLYTHE MASTERS, THE INFAMOUS EX-JPM SILVER MANIPULATOR IS UNDER INVESTIGATION FOR ENERGY PRICE RIGGING IN CALIFORNIA!!! I LOVE IT!