EOD Trade

I really didn't see much that changed my early thoughts about the market, take a look at the averages...

 SPY 1 min leading negative all day

IWM 1 min leading negative

QQQ 3 min leading negative

QQQ 5 min leading negative

DIA 1 min

DIA 3 min

So far to me things look very much the same, a near term pullback and I'm guessing that will be accumulated, but we'll have to see proof of that before I'd consider any hitch-hiking trades.

As far as VXX, I expected a head fake move below the range as it was so obvious, there are some signals it is being accumulated, but for me to add to the already established position from today, I need really strong confirmation to bring this up from speculative...

 UVXY 1 min

VXX 3 min

VXX 5 min

UVXY 10 min, I wouldn't expect any signals past 10 min with the few hours that were left as price moved below the intraday range.

I'll check on futures tonight and especially the USD/JPY, NFLX is one of the positions that would be VERY interesting on the pullback theory mentioned, there are quite a few more like GOOG and even AMZN.

GDX / NUGT / DUST Update

I've had quite a few emails today about GDX / NUGT so I thought I'd show you what I'm seeing and why I'm holing off for the moment.

One of the things that bothers me and is difficult to show without showing 6 charts of 3 assets (18 charts) is the lack of confirmation between GDX, NUGT and DUST, they usually have excellent confirmation. The other area of some concern for a new long position is the intermediate charts for GDX... they don't confirm with short and long term charts, ironically this is where DUSt and NUGT do show confirmation with GDX so I've taken a patient approach as these can be traded for 1 or 2-day trades, but I'd much rather catch a nice swing and even with the short term trades, the signals have to be strong and have excellent confirmation.

First GDX...

 This daily chart of GDX shows several interesting features like a head fake move on a daily bullish hammer at the yellow arrow and a trading range right under resistance.

On a 60 min chart you can see the range a bit more closely.

 There's little doubt in my mind that GDX is very close to being ready for a big move to the upside as I have recently talked about as far as a base area, this leading positive 60 min is just more confirmation.

However at the range, this 10 min chart is troublesome

As is this 15 min chart, they look like they want to see a short term pullback

This is NUGT on a 30 min chart, again I have little doubt a big move to the upside is very close, but...

On the same 10 min chart in the same range area we have the same negative relative divegrence.

 The 15 min chart shows the same like GDX.

 And the intraday 3 min chart is lagging price.

DUST on the other hand is showing a positive 60 min divergence in that same range area! Also other timeframes...

 I have little doubt DUST sees some strong, trend downside as there's a double top in place on this 30 min with a stronger leading negative divegrence, but closer to home...

The 15 min chart is confirming the GDX and NUGT as DUST is the inverse of both GDX and NUGT. The 10 min chart is very similar.

So this is why I'm being a little patient with the assets, the range is becoming obvious so I'd guess some kind of shakeout will be forthcoming. If there's a DUST trade, I'll take it so long as there's strong objective evidence for it, right now I don't see that for the entry side of GDX/NUGT although I do see very strong longer term or bigger picture upside trend signals.

Quick Leading Indicators Update

I just took a quick look at leading indicators and while I didn't see anything screaming, I didn't expect to with the chop/noise trend since last week, I was looking for stuff closer to home or very near term trade such as would be consistent with the VXX position.

I found that HYG was roughly in line, not leading. However the more finicky High Yield Credit was negatively dislocated and is giving a signal consistent with the market averages update earlier in which I said I thought a pullback in the market was likely, but to widen yesterday's small base, still leaving a very small base, but more reasonable than yesterday's alone.

Sentiment was also underperforming and negatively dislocated along the same lines as the averages and a pullback.

VXX of course was underperforming its correlation handily, but that would be the case on a head fake move, whereas the other flight to safety trade (or protection), TLT was handily outperforming the correlation with the SPX.

Yields were also negatively displaced, they tend to pull price toward them like a magnet, this wasn't a huge local divergence, but again, along the lined of earlier analysis and essentially the same analysis from late last Friday.

VXX Update

I suspect VXX may have just made that head fake move I was talking about earlier in this post, Trade Idea: VXX / UVXY (long).

Although VXX is the front 2 forward months, take a look at the movement in the charts, the first thing that made a head fake move a highly probable event was the range today.

 VXX and a volume surge, likely stops hit... However none of the averages posted a new intraday high and still remain in negative divergences.

 DIA 1 min

IWM 1 min

QQQ 1 min

SPY 1 min.

I'll be looking at VXX/UVXY carefully and will update you on any substantial changes or head fake confirmation.

NFLX Follow Up...

This is the last update from yesterday for NFLX where things became a little more clear, NFLX Trade Idea Update.

As far as intraday charts, they look just like the market averages so if NFLX is setting up for an entry (long) and a bounce or counter trend move which looks like it will have much better relative performance than the broad market averages, we are likely VERY close, again though like the averages, accumulation can only be confirmed once we get a pullback.

Take a look at the charts, very much like the market update.

 1 min intraday just like the averages.

2 and 3 min are both leading negative like the averages.

As I said, there's no intraday damage to the 5 min charts and that's why I suspect it will be a constructive pullback (the kind you want to buy that is confirmed by accumulation of the pullback).

I'd guess NFLX would move to yesterday's lows where stops will be placed right under support and we'd see a head fake move to hit those stops just before an upside move.

Since I've made the "bigger picture" case for NFLX so many times, I'll just remind you with this 1 chart...

10 min leading positive, this looks a lot like NFLX is getting ready to make an upside move and the charts above may be giving us near exact timing for that move.

Trade Idea: VXX / UVXY (long)

This is a VERY speculative trade and likely very short duration, I'd guess it's over before the F_O_M_C tomorrow, but who knows, we'll have to monitor it as we sometimes find F_O_M_C leaks (not often, but when we do they are glaring).

 VXX 1 min

UVXY 2 min

VXX 3 min

THIS IS WHAT I NEEDED TO SEE, A 5 MIN LEADING POSITIVE THAT WAS CLEAR IN A RANGE. I'LL TAKE THE TRADE BASED ON THIS ALTHOUGH SPECULATIVE.

UVXY 10 min.

If you want to put a higher standard on the trade you can look for a stop run/head fake move below today's intraday lows / range, that would put a higher standard, but I'm ok with entering here as I'm treating this as a speculative position, smaller in size.

I'm going to go with VXX weekly May 2nd at a strike of $40 here, I may add to it if I see a head fake move.

Quick Market Update & Likely Trade Idea Coming

Remember the VXX / UVXY potential trade idea from earlier today, well from this market update it is looking more likely to be the kind of trade I would want to enter (not a day trade, but worthwhile with some leverage, but I'll post VXX next).

The charts seem to show what I expected yesterday, a pullback coming, but likely to form a little larger base than just yesterday's half a day, that would make VXX a decent quick trade or UVXY (both long or calls). The 5 min charts for the averages aren't seeing near term damage today and this is why I think a pullback to widen yesterday's foot print is likely.

 DIA 1 min intraday negative looks like a pullback as expected late yesterday is becoming high probability.

With only a 1 min chart negative there's about a 50/50 chance it's a consolidation or pullback (time vs price), buy when a 2 min or longer chart is also divegrnet, the probabilities go way up toward a pullback rather than consolidation.

And the DIA 3 min, as I said, no damage to 5 min charts intraday.

IWM 1 min leading negative, it got a head start late yesterday, but it's still a valid signal.

QQQ 3 mins leading negative, a pullback at this point looks very likely and VXX/UVXY should bounce a bit on the pullback.

SPY 1 min leading negative divergence

SPY 3 min

Again, no 5 min so I think this is a constructive pullback for a little wider foot print, but we won't know that for sure until we see a pullback and confirm accumulation, otherwise it's likely nervousness in front of tomorrow's F_O_M_C, either way, VXX should see some upside, those charts are coming next.

VXX / UVXY Short Term VIX Futures Update

I have been watching both the longer term VXX charts as well as recently (this morning) the short term charts and already have the quotes set up for weekly (this and next) call options, the only thing I'm a little skeptical of is duration and that's not a problem as far as leverage; I almost think there's going to be an intraday pullback that may require the positions be closed intraday and I try to stay away from ideas that are day trades. I suppose I'll watch them a bit longer and see if there may be an opportunity for a longer duration position, but for those of you who don't mind a day trade and can tend to it, take a look at the charts.

 VXX 1 min from in line to a flat range where we often see accumulation/distribution which is ironic because looking at price only, action looks dull unless it's very tight (the range), to a leading positive divegrence.

 UVXY 2 min... These are not quite where I'd take the trade anyway, but with the range , a possible head fake under the range and the ability to add to the divergence, this is looking like a more probable trade.

 VXX 3 min is seeing migration.

 I wouldn't take the trade until/unless the 5 min chart looks quite a bit better, but with the migration moving and the range in place, it's looking like a more probable position.

 UVXY 10 min from nearly perfectly in line to a leading positive divegrence, again, the duration of a base or the footprint here is the immediate problem I see as it suggests the trade may not be long enough to move in to tomorrow.

VXX 15 min shows the change in character in VIX short term futures, from in line to the left (remember this is a rolling contract) to a leading positive divergence, this is indicative of the longer term charts that we see in the averages as well.

What the averages do today will also have a big impact on VXX as they move inversely so keep an eye on market updates.

Opening Indications

Not much has changed since the trend assumptions posted late yesterday, Chart Grab Bag.

The Index Future post from this morning, Index Futures Update, looks pretty spot on so far, although I'm only looking at very near term intraday data.

For instance the USD/JPY which dragged the Index futures higher overnight had a negative divegrence in to pre-market and the open...

And that led to early downside in the Index futures as the pair dropped lower.

As for the Yen, it does look like it could rally a bit from here pushing the USD/JPY down even further which would fit with a pullback today as was posted in the EOD post yesterday.

Yen 5 min positive divegrence would likely send the USD/JPY even lower, this seems to be more of this continued choppy noise that you need to move in and out of pretty quick or just ignore it and focus on the longer charts and swing trades and realize there will be some normal drawdown here and there.

As for the averages, yesterday in the EOD post the IWM showed a clear intraday negative and the market usually picks up where it left off the next day with 3C divergences, here are the averages this morning.

 SPY went negative on the open this morning (1 min.) as the IWM suggested yesterday afternoon.


Here's the migration so far, only to the 2 min, but we'll see and that will largely determine whether a trade (long) is warranted or not.

 This is the DIA 1 min, the negative divegrence is pretty clear.

Migration is clear on the 2 min as well

And out to the 3 min chart, I suspect this will keep moving until we get the pullback today I suspected late yesterday which would likely form a little larger base than just yesterday's 1-day base.

 The IWM was already showing a negative like the DIA yesterday afternoon so no surprises here.

 And the IWM seeing negative intraday migration out to the 3 min chart.

I drew in a white trendline because that's where I'd suspect price would be headed if a larger footprint/base were to be carved out, it would still only be a small 2-day base area, but that's a lot more meaningful than yesterday's action only that already fired somewhat.

 QQQ 1 min

And the QQQ 3 min, this chart doesn't look great so if there is to be a pullback and further basing, the Q's need it pretty bad as they are in a bit of an ugly situation here.

This is my custom NYSE TICK data Indicator, the trend is pretty clear.

I'll have a VIX update up shortly.