Update

OK, well last night's 3C charts of the Dow's negative divergences seem to be accurate meaning yesterday is likely to have been a false breakout. False moves create real and fast moves in the opposite direction. Lets see what we get today. If you are new, look t the core ETFs we are using to short the market and the limit shorts will start triggering if this continues down, so pay attention to them, put them on a watchlist if you can with an alert. TeleChart has this ability.

Lets see what this turns into, but you know my suspicions. As I was saying to newcomers, we want to be at about 50% short and the rest cash or a little in UNG long. Another 25% short will be added below SPY $104.40 and the remaining 25% stays in cash. If you don't have your positions, you should take any chance you can get (any intraday strength to short into). RISK MANAGEMENT before you place the order, not after!

Keep your arms and legs inside the vehicle, and put on your set belts, today is likely to be another volatile one.

Read Trade Guild tonight

Last time we had the NASDAQ breakout and the S&P and Dow fail to follow I felt the same as I do now, except today we had the mirror opposite. 3C is showing significant divergences to the downside, my money is on false breakouts today in the Dow and S&P, but if they are not, we can look forward to another rally and a right shoulder to complete a H&S top. News is not driving this market, it is being used to drive volatility. Fundamentals are out the window. How can you have a valid argument for fundamentals/economics when an index is down nearly 300 points in a day or two and then up 200+ the next? This is one of the toughest trading environments I've seen since late 2008 when the Fed was the culprit in manipulating the market.

I'm hesitant to issue any trades until this situation resolves which could be as soon as tomorrow if the Dow/S&P fail and the NASDAQ and Russell fail to make any upside. At that point things will make a lot more sense and our plan will remain valid and intact. If not, then be prepared to hedge and raise cash. You are now trading in one of the most difficult environments I've seen in a few years. As I shout from the rooftops every night , "RISK MANAGEMENT!"

THE UNG TRADE IS WORKING SPECTACULARLY, STICK WITH IT!

WDC is approaching an area in which it would make for a high probability low risk short.

Watch LZB (S) for a break below $10

Watch the SPY for a break below $111, it could make for a quick profitable short.

Any move up in the Dollar index or UUP will be very bearish for the market. It traded in a fairly narrow range today suggesting that the downside pressure may have subsided, there are short term positive divergences as well.

URRE is a highly speculative play, but it looks like the momentum crowd may be sniffing around. You could try a long on the open and close it at the end of the day should it take any loss or make a new low. This would be a quick pop trade only. It is highly speculative.

The exact same applies for URZ.

If we do continue on an upward trajectory, I have a lot of long positions that should do well(in an upside environment), BUT, Wall Street is using extreme volatility, as noted 2/3 of the market days in the last month have seen triple digit moves up or down. I do not think it is wise to chase yesterday's big move considering the fact that the S&P 500 has had a net move of -.50% in the last 20 trading days (4 weeks). This is the meat grinder. For now, lets stick with the plan until we see something suggesting otherwise. Chasing yesterday's triple digit move is more than likely going to put you on the wrong side of the next day's triple digit move. As I've stated before, your greatest edge over Wall Street is your ability to wait. Patience isn't easy, but it is exactly what is called for right now.

If you have an interest in a specific stock, email me. If you are even a little unsure about risk management, email me immediately.

Tomorrow is another day.

Update 3

This could be the false breakout attempt I mentioned last night, 3C remains in a deteriorating negative divergence

Update 2

The divergence to the downside is getting worse and prices on the SPY have broken the intraday uptrend

Update

A bearish ascending wedge in the 1 min SPY

Continued deterioration in the NASDAQ Advance/Decline Ratio

And mostly negative 1 min divergences in about 11 of 12 charts looked at.

This a.m.'s action thus far is inline with last night's forecast. We'll have to wait to see what this becomes, but it does not cause me any concern at the moment with regard to our bearish stance.

Clarity

We've found a spot of clarity, whether short lived or not, (volatility has masked Wall Street's intensions), it has confirmed the strategic outlook we've been preparing for for well over a month now. Trade Guild has the charts up today.

I do not think that I will be posting new trades tonight (although check in the morning as I'm still looking over charts) because I posted a lot of limit trades that should trigger if we get the downside that I believe we will see shortly. Also the core of our positions is in the inverse, leveraged ETFs. The only excellent long I'm calling out is UNG, it's not too late to buy it.

If you have a question about the outlook for any particular stock or industry group, email me.

Our plan has not changed, we are still looking to add the final 25% bringing us to 75% short when the SPY breaks the $104.40 area. We will keep 25% in cash for opportunities.

For whatever reason, it seems that 3C is one of the few indicators that is thriving in the new "volatility based environment". Traders are being punished all around trying to hold positions with this volatility and many feel they can not get ahead of the algo-trading. 3C seems to uncover icebergs. Right now we are on the event horizon of a dramatic shift in the supply/demand structure of the market as Wall Street has been busy laying the trap that will destroy a lot of accounts.

Wall Street understands that the dollar can not continue to rise without negative effects to the bullish environment traders still think we are in. Just like trading options and making a lot of money in your first trades, people become emotionally attached to that which has made them money, in this case the uptrend that started in 2009. Do not become attached to what was, the next event will not be the same as the last. Stand back and look at the world economy, what does simple common sense tell you about the direction of the market in the coming months?

Go back and look at the charts of the Dow now vs. the Dow pre-crash 1929, it is striking.

There remains the possibility, not probability, of a right shoulder taking shape, a 5-day chart will illustrate this possibility fairly well.

As for today's events, the Dow staged a one day false breakout. The NASDAQ, S&P and DOW are now in close parity. The dollar index took a big hit today, the market could not take advantage of it, rather chose not to. Gold has started to form a daily negative divergence, meaning distribution has begun in the commodity, this does not imply an impending reversal of trend, just that intensions are there and they do not portend for a healthy bull market in gold.

Based on observations, but still an opinion, I believe that we will see a market completely decoupled with the standard market relationships that have been in effect for over a century. Something very strange is happening and assumptions based on past market behavior are apparently being setup as a terrible miscalculation.

All of this said, I would be 100% remiss if I did not implore you to keep risk management as the forefront of your defenses. We could be 100% wrong, events could change the landscape and smart money is not always smart and reserves the right to change their mind with little notice. WhiLe I believe we are on the right track and I have a lot of money committed to this idea, we must always accept the possibility of being wrong and the only life preserver in such a scenario is risk management. IF YOU DO NOT HAVE A PLAN OR DO NOT UNDERSTAND RISJK MANAGEMENT, EMAIL ME IMMEDIATELY SO WE CAN WORK SOMETHING OUT TO PROTECT YOU.

Finally, this chart of the NASDAQ Advancers/Decliners clearly demonstrates how quickly the market turned today. As I said on Trade Guild, this market is in a lot worse shape than it appears to be.

Look for early updates tomorrow morning.

Update 3

We now have serious leading negative divergences in the regular 3 C indicator. By the looks of the candle formation, we could have something like a shooting star reversal. At this point, we now have an edge. We are out of the longs, save for UNG and if we needed anymore shorts, this would seemingly be the last best opportunity to get them considering the probabilities.

Update 2

You can read about this new indicator on Trade-Guild, here are the current readings-3/4 are negatively divergence, the IWM is not in a great position but I wouldn't call it negatively divergent yet using this version of 3C.

Update

As mentioned last night, the QQQQ is outperforming the DIA and the Russell is doing even better, however, the IWM has shown the first crack in the trend across 8 of the 9 models I'm currently watching for a short term reversal. These are subject to change, but at least at the present time, it seems that some equilibrium has been found in the pricing structure, despite rising prices and it seems to be forecasting net distribution at this point. The SPY has not filled the gap and right now its gap is the biggest impediment to the markets moving forward. Just like we saw last week when the NASDAQ bros. broke out of their consolidation and the DOW and S&P refused to follow, there is a resistance in the SPY to fill the gap on the 15 min chart that has remained as resistance. The SPY is showing 7/9 models in a negative divergence. Watch for lower prices soon, whether this has fulfilled the intent of Wall Street which may have been to sell short into higher prices or not won't be established until later. In english, I'd consider taking any short term long profits and now seems to be a good time to establish a small % of any shorts you may need to fulfill your strategic goals.

This does not apply to UNG which is a long term long position although it will probably move with the market short term

Check out Trade Guild's post tonight

We have had amazing success calling the market recently, there will be no call tonight as everything is scattered. My gut feel is the gap in the SPY will provide resistance, however, the NASDAQ has recently gone into a more aggressive bull mode and seems to be set to outperform the other averages.

Nothing about out plan has changed as of now because there has been no significant change in the market yet.

The dollar index is extremely bullish, but the NASDAQ 100 seems t be as well-this is an uncoupling that you see from time to time, but it will resolve. Judging by the Dollar index, it seems the market is set for a fall, but I do not have strong, solid signals that I would trade at this point and I will not guess, that is not what you pay for.

As soon as I see something, which can be as soon as tomorrow, I will post it immediately. For now, I'd keep doing what you are doing. If you are new, then you should strongly consider putting together a short position that equals half of your portfolio. 25% will remain in cash and the other 25% will be added short when the SPY breaks $104.50 (confirmation).

Being I don't have a solid direction, no short term trades will be posted tonight, perhaps tomorrow.

In this case, the best bet is limit orders. I've listed quite a few tonight. There's one MARKET ORDER that can be executed at market in the morning.

If you are not receiving the updates in your mail, please email me.