GLD/SLV/USO UPDATE

Yesterday I thought GLD would reverse down today, it has, but marginally. I also said SLV seemed to be about a day behind (meaning it was still stronger then GLD) and SLV is up today so far, so thus far the analysis has been on track.

Lets take a look at the charts for the PMs

 GLD down marginally so far

 The 15 min chart has deteriorated more today suggesting that GLD does have at least a swing move of several days to a week moving down. There are some short term positive and negative divergences that may keep GLD a little laterally volatile intraday today, but I still believe that it's heading lower.


 SLV which looked stronger is up marginally today which isn't surprising.

 The 10 min chart doesn't look nearly as bad as GLDs, but it is showing some weakness

The 15 minute chart hasn't developed a strong negative divergence yet, so I'm not ready to say that it'll reverse tomorrow until this chart starts to fall apart some more.

USO

 Before the events in Israel today, I was expecting a normal correction in USO, (if I was long, I probably wouldn't even sell it and just ride out the correction, maybe add a little on the weakness). However events moved oil up. 3C 1 min above looks as if it is going negative now. There appears to have been some short covering as well so I'm not sure what this means for our correction, it could be less severe, it could not come at all if events continue to escalate. All in all, since the correction wasn't very threatening to a long position in USO,  personally wouldn't take any action other then to hold the position.

 The 5 min chart is showing some weakness, partly from yesterday, and I assume partly because today's reaction was short covering and not accumulation.

The big picture on the 30 min chart still shows USO in a positive leading divergence, so it seems it's still on track to take out the March highs.

GM TRADE FOLLOW UP

HERE'S THE ORIGINAL GM TRADE POST The entry was $32.77. Since then, GM has acted well for us.

 GM is threatening a new low. Now that GM is trading below the IPO price, just about every large fund that bought it is now underwater. The selling has picked up subtly as we'd expect to see, they don't want to crash it, but they do appear to want out.

 1 min 3C chart suggests we may have an opportunity to short GM on a little strength some time today or add to established positions.


 The longer term 60 min chart still looks very bad for GM

Here's a potential stop around $32.80

HDY Follow Up-New Position

HDY was featured Feb 16th as a trade for that day it's now up close to 24% and in an area in which a new break out looks likely to occur. If you didn't catch the original trade, you may want to consider looking at it here.

 We caught this one just coming out of a triangle. It's consolidated a bit laterally through time and looks like it's getting ready to try to take out the next resistance level.

 Here we can see on the 15 min chart, accumulation, a move up since then that has been confirmed with 3C.

 Intraday there's another triangle and volume looks right for this type of consolidation. There's always the chance of a downside dip below the triangle before a move up, but we didn't see that last time.

If you are considering this trade, you may want to use a tighter stop as sen on the 60 min chart here around $5.87

DE Trade (short)

 DE is one of the few stocks trending down without a major top in place or a "V" shaped reversal. The red square represents a volatility move outside the channel. The candle stick pattern of the last 3 days is that of a confirmed reversal.

 Here's the 15 min chart with a negative divergence on the volatility move/breakout of the chanel

Personally I'd like to short this on some strength around the green square. My stop for this trade would be $92.49 making this a fairly low risk/high probability trade.

Israel and Oil

Just this morning, Israel was listed here as a flashpoint.

Take a look at oil as Israeli tanks enter Gaza and several civilians are killed

The action in the red box is what short covering looks like, that and computer trade.

There are some negative divergences building in that have taken away some of the momentum.

As you know, as of yesterday we were expecting a normal, run of the mill pullback in USO, nothing that threatened the uptrend. It seems as of now, events will dictate oil for a bit. The question technically is whether the short covering covered the entire position that was set for a pullback?

It's interesting to see how much more aggressively oil reacts when Israel is involved. There are some real fears building that this transition in MENA may have disastrous effects on Israel strategically.

CAT TRADE (SHORT)

 BELOW YOU CAN SEE THE 15 MIN 3C CHART SHOWS NO CONFIRMATION OF THE BREAKOUT MOVE, WHICH SUGGESTS THIS IS ONE OF MANY FALSE BREAKOUTS.

As for entries, more aggressive traders may want to enter here/today, if you are more conservative, then a break below $106.03 would be more appropriate. My stop would be at $107.71

SPECULATIVE CURRENCY TRADES-UUP/FXE

Recently we've been watching for a possible false break in FXE and UUP, it appears we have that. With both trades in the position they are at, the trade makes sense as the risk is limited.

 FXE seems to have hit a double top with two false breakouts.


 FXE 15 min chart suggesting a reversal

 FXE's 5 min chart suggests it's ready to go. Below is an indicator I rarely use, it gives signals when there are extreme conditions and right now, it's very negative.

My stop for FXE would be $141.85

UUP

 Here's the possible False breakout in UUP

 UUP's  15 min chart suggesting a reversal-the volume seems to have accomplished what a false breakdown is meant to accomplish, knock traders out of their positions.

UUP 1 min seems it's ready to move up.

My stop on UUP would be $21.60

So Far, Pretty Close To Target & ADM Trade (short)

3 of the 4 major averages did gap up today, the early trade however will tell us little. Remember, we are watching for a reversal in the broad market.

The assumption yesterday from the 3C charts was that GLD would reverse today, it has done so.

The same is true of USO, although USO's reversal looks more like a typical correction, we'll be watching for the buy/add to opportunity there.

As for a possible short trade shaping up, take a look at ADM. Food inflation is out of control and ADM's EPS/margin may be under a great deal of pressure.

 ADM is clearly in a top on the daily


 Looking at the moving average crossover screen, we have a confirmed Sell Short signal with all 3 indicators in unison.

 The daily 3C chart shows the negative divergence at the top.

 The hourly chart is more specific with the top divergence as well as the recent bounce positive divergence.

 The 10 min is in a leading negative divergence...

And today on the opening gap, the 15 min chart has gone negative. If the 15 minute chart remains negative today, today should be our reversal day in ADM and by the looks of the 10 min chart, negative pressure should keep building into the 15 min chart.

OXGN Trade Alert (long)

You may want to take a look at this speculative trade, there's a good possibility of follow through buying today.

Middle East Contagion

We now have 4 days of protest in Syria, which was one of the first countries I recall to recognize the risk when Egypt's troubles started, the Syrian government immediately shut down the internet. Now, despite civilian casualties from the Syrian regime, protesters are still out in force.

Bahrain remains volatile.

Yemen is actually looking as if it may be the next Domino to fall as senior military leadership defected to the protesters side yesterday. This leaves long term leader of 30+ years, Saleh in a very tough situation. He can release his top trained troops, but they are counter-terrorism troops that have been trained by the US. This of course will be another problem for Washington, US trained troops and equipment killing Yemeni civilians.

Libya seems to be a foregone conclusion, or at least Gadhafi seems to be. I think Bahrain may be very dangerous because of religious divides, Libya because of tribal divides and Syria simply because of Iran.

One thing to watch for that may turn Libya into a total US nightmare, as rebels troops regain ground and start to advance under the umbrella of coalition protection, will be photos of atrocities they are likely to commit. It happens in all wars, but the rebels in Libya are rag tag group of civilians peppered with a few officers; there's no discipline, no command and control and if such an event were to occur, it would severely undermine the efforts in Libya and destroy the credibility of the rebels as Freedom Fighters.

Also watch for an escalation in hostilities between Israel and Hamas. It seems that a new round of violence promises to grow in the region.