HDY Long

 HDY run up, consolidation and possible 2nd leg up.
 3C looks really good here and it, like most indicators does not usually give such a strong signal during a consolidation.

Nice volume on the gap up, the red box is a potential tight stop, I'd consider this a long here or just over the recent highs around $5.17 or so.

SHZ Long

I don't think this stock is big enough to see the pattern recognition/manipulation we see in other stocks, therefore I'm more inclined to trust a breakout from the triangle you will see below.

We saw a nice run and a pullback which has narrowed the trading range into a consolidation triangle.

 Toy can see 3C calling the pullback from the first major run up and now showing a positive divergence in the triangle, which is a little rare to see.

 Again the 15 min chart confirms.

Here are a couple of potential stops, one at the trend channel near $6.30 and another around $6.65, depending on how you decide to enter the trade. I'd probably set an alert for  breakout of the triangle and see if we can't get a second leg up out of SHZ.

Weaning the Market off of QE

I've said many times I have a gut feeling something dramatic is changing behind the r.has found some legs.  We seen totally bogus numbers coming out of the BLS and other government agencies to give us the impression the recovery has found some legs. We've seen very strange behavior in Treasury auctions, and some strange comments coming out of the Fed. Today's Bloomberg saw the Fed's Fisher talking about ways of starting the end game.

As I noted it seems like the market and those manipulating the market averages have been in a rush to get it up as fast as possible as if they had a deadline, for if they truly were interested in creating a sustainable bull move, then we'd see the healthy bull market pullbacks that we have only seen once and in some averages not even once since QE2.

In any case, I feel something is just simply out of place. I'll keep looking for the tell-tale confirmation of such, and I appreciate the articles and thoughts you have shared with me. This has opportunity written all over it, we just need to find the right place and time.

XLF follow up

Here's the first break.

This is the bear trap part, typically we see an upside move breaking out of the triangle to the upside which knocks the shorts out and brings the longs in, then it heads back down and knocks the longs out. This is what happens when there's no liquidity in the market and the HFT firms need to make the most of every pattern that they know traders will respond to. Ultimately the pattern (bearish wedge) should be the final outcome. The MERS issue decided yesterday is a big blow to financials.

LNG

  Is up nearly 6% today and looks a bit wishy-washy. I'd trail a stop behind this one using a 30 bar simple moving average on a 60 minute chart.

XLF Update

Yesterday we saw an open volume melt up, which is a sure sign of manipulation and it came just as the story about the Judge who decided MERS was not a legal way of transferring mortgages saying:

“Merscorp Inc., operator of the electronic-registration system that contains about half of all U.S. home mortgages, has no right to transfer the mortgages under its membership rules, a judge said...U.S. Bankruptcy Judge Robert E. Grossman in Central Islip, New York,in a decision he said he knew would have a “significant impact,” wrote that the membership rules of the company’s Mortgage Electronic Registration Systems, or MERS,don’t make it an agent of the banks that own the mortgages..."

That's when we saw the open volume melt up to try to keep most of the market green. Here's XLF on its own.

 a daily wedge, we are seeing a lot of these recently.

 XLF 60 min wedge (bearish) looks like it may breakdown, but we know the volatility games so that would suggest we get a couple of moves down , up and down again as has been the norm.

 3C 60 min in a negative divergence

15 min 3C also negative.

It seems the MERS decision is a major stumbling block for the banks and anyone else golding the derivatives of such, like MBS. This could force a major putback if the decision is upheld and banks will have to significantly increase reserves.

FXE Euro

Contagion is back in the fear cycle and now we have seen a shift of the spotlight toward England with tising inflation and unemployment.

Here's the Euro, which I'm bearish on.

 Here's the fractal nature of price action, a daily H&S top and below....

 This is an hourly H&S top which is circled in the red box on the above chart,

3C looks perfect for a H&S top and it may bounce to the area of the white box, ultimately though, I'd say the Euro is going much lower.

TSO on the move Again

If you are in this position keep in touch with me, at this point it's just trade management.

UNP FOLLOW STEP

 DOUBLE TOP

60 min 3C negative divergence at th test of resistance. Many transports aren't looking good.

SLV on Deck

Here's the link to last week's coverage of SLV


Time to take another look.

 Here's the bigger picture of SLV going stagnant late last year and forming a top. Obviously the top broke down, but as usual, these patterns are likely to see some sort of manipulation to shake traders out. Recently the bounce has wedged which is bearish even though it is rising and it also appears that there has been a breakout from the wedge to the upside (in technical analysis this would be considered a failed pattern, but it's really just how the introduction of a technology arms race among trading firms and historically low liquidity has played out to take advantage of traders who are stubbornly indoctrinated in the out-dated precepts of technical analysis). This breakout of the wedge could and probably is functioning as the head-fake shakeout which causes shorts to cover, bulls to buy and eventually the pattern plays out and next the longs have to see. Al in all, the HFT firms are making money in several different ways on one false breakout, the snowball effect of traders being shaken out of the trade helps momentum on the reversal.
 

 60 min 3C hasn't kept up with price so there's no confirmation of the strength of this bounce.

 The same is true of this 15 min. chart.

There are a couple of different entries possible here and I like the trade here for the reason of lower risk/higher probabilities. The first way is to jump right in, in that case I'd say use a stop that you see at the red arrow, above $30.44. The next option is to go short now with a tighter stop at the red box around $30.25 or so. The 3rd possibility is to wait for price confirmation, thereby increasing your odds of a winning trade, but giving up a few percentage points. In this case, I'd stick with the stop around $30.25. Last you could phase into the trade with a combination of any of these entries.

Should we see a higher high/higher low tomorrow, then the limit orders/stops change a bit. Feel free to email me with any questions.