The Last Post Was the Correct Post

"looking at bonds, yields, bond funds, do not be surprised to hear the Fed the words Quantitative Easing, but not through the printing press, rather through buying bonds."


The policy statement made obvious that they will re-invest funds from mortgage backed securities into long term bonds.


Now, watch the volatility, it will be crazy today and we should see the market's true feelings about this within a few days. As I said, typically the initial reaction, is the incorrect action.


I'll be watching every tick.

Some very quick observations

looking at bonds, yields, bond funds, do not be surprised to hear the Fed the words Quantitative Easing, but not through the printing press, rather through buying bonds.

UUP is a serious long to consider, a short squeeze there could be a fast move up.

There was also a positive tick divergence and a small 1 min 3C positive divergence around 1:30 in the SPY.

Underlying Tone

This one chart makes me wonder if institutional money is moving out today.It appears they are, but we'll know for sure in a matter of a few days after the Fed reaction stabilizes and we see if this right shoulder breaks hard.

As you can see, the 1-min negative divergence continues,

However, in a somewhat contradictory signal, UUP is also seeing a negative divergence (UUP is a proxy for the $USD which trades inversely to the market)

The TICK index is showing intraday signs of negative divergence and a downward reversal here.

Finally a negative divergence on the 1-minute

This should lead the market down for another leg-the AAPL long may be affected by this

For Day Traders

AAPL looks like it will have a decent intraday bounce coming any minute.

The Divergence is more positive

I'm seeing the probability of a run up to $112.20 or so on the SPY, maybe even higher into the gap. BX should rally as well, which is a good opportunity for a second chance entry on the short. It's a longer term position.

Update

Well the market has dropped out of the ascending wedge, this is considered a break of the wedge if the close were to hold, but if you saw the two H&S tops at Trade-Guild last night, you know that I would first expect a false upside breakout before the wedge truly gives way.

The US Dollar has broken out of it's descending wedge, bullish if it holds for the dollar, but bearish for the market.

The one catch is I'm not seeing an appropriate level of 3C distribution with the sell-off, it should be much lower (the indicator), you could say by it's position that it's building a relative positive divergence. We'll have to see, but I kind of suspect they may be taking this own now to only take it up at 2:15. I'll just have to keep watching.

BX Short just triggered

See the July/August list at the bottom

RAD

I thought I'd bring this one to your attention, RAD on the current list closed today at the limit order level. It's a nice looking chart, you may want to tighten up the stop. Perhaps enter at market and only hold it if it is higher at the end of the day, intraday moves don't count otherwise you'd be stopped out 5x in a day, but make sure to use good position sizing as the risk is still sizable should it fail.

I would personally have a stop around $.98 This is also very speculative because it is under $5.00 so make sure you adjust your risk down accordingly. Otherwise, this is what we have been waiting for. It was listed at the end of July on the current list.