GLD Update

GLD retraced 62% of today's move from Friday's close to today's high, it's currently at about a 40% retrace and looks as f it wants to move higher intraday.

We have another triangle with some slightly bullish recent 3C readings, this may turn out to be a head fake, but it does appear that it wants to make a move higher into the close.

The Many Possibilities of USO

USO has been a tricky one lately, generally my opinion has been that t would break down, accumulate and then break out of the bull flag for real, thus my short term bearish, intermediate term bullish stance.

We may be reaching a decision point in this ongoing drama and any stock that breaks out and then sits on the breakout level for 3 days is a questionable drama.

 The hourly chart is bullish for USO, thus my intermediate term stance.

 The 10 min chart has been negative almost since the day it broke out of the bull flag and the trendline you see is the top of the bull flag, normally on such a breakout, you'd expect to see follow through buying sending USO higher, instead it has just sat there with the trendline acting as support, but making no progress. I will note there is some slight progress today in the 10 min chart, even though it remains in a leading negative stance.

 Today USO has started a triangle, which would generally be interpreted as bullish, it also suggests a directional move breaking this stalemate, volume is perfect for the price formation.

 Note also how the Bollinger Bands have tightened up, also suggestive of a directional breakout coming shortly.

The 5 min chart remains bullish.

I think we are getting close to a resolution. If we get a breakout that is solid and 3C improves, then I see no reason USO shouldn't continue higher. The other prospect and the one I have felt is more probable is a breakout of the triangle today that fails and sends USO back into the flag, where it is accumulated and then makes a proper breakout with some volume and 3C support. Either way, I think we are finally nearing a resolution. In addition, either way, I still remain bullish on USO's intermediate term prospects.

Last Night's Futures

This from the WSJ 15 hours ago, "Dow Jones Industrial Average futures were down 114 points in screen trade."


From Zawya.com 11 hours ago "Dow Jones Industrial Average futures were last down 131 points in screen trade. "


From the Economic Times 11 hours ago, "Futures for the Standard & Poor's 500-stock index were down about 1 percent. "


From Market Watch, 12 hours ago, " Dow Jones Industrial Average futures DJ1U -0.71% were down 122 points at 12,499 and S&P 500 futuresSP1U -0.82% were down 12.80 at 1,328.20 points. "


From Futures Magazine 12 hours ago, "markets Sunday night with the S&P 500 Emini contract sinking as much as 18.75 points"


From Zero Hedge Last night " And The Opening ES Print Is...

1331.75

Sorry, Timmy, Boehner, and Obama. No apocalypse. Better luck next time.

Update: 1326...

Maybe we spoke too soon.

Update: 1322..."

As you can see, the futures were manipulated last night, causing the bears to short the market on the open, the recovery through the morning puts them at a loss, when they start to cover, we get a short squeeze and maybe enough momentum to get to the breakout levels I've been anticipating since last week. The Q's already made it.

Here's the updated Sector Rotation, which is favorable to the DOW-30.

The most important change for the Dow would be Industrials in purple, Energy s also helpful, but there's a major change in industrials. Tech remans strong supporting the NASDAQ-100

The point is, the sheeple following the futures were deceived. This isn't to change any views on the health of the market, we talk about tactical (short term) and strategic (long term), this was a tactical play to effect a strategic outcome. Remember, nearly all reversals we see (in this case we are looking for the downside reversal) are preceded by a false breakout, The Q's are there, the S&P is close, the Dow is close.

Market Update

I want to get ths out, then I'll follow up wth the rest of the post. Last night in a thin market, Futures were anhilated, implying a market about to fall off a cliff, it was a total farce and similar to what Cramer talks about in the video I posted. I'll follow up showing some of the futures from last night and how they were used to absolutely slaughter the sheeple.

Here's the SPY now.

 Here's a 5 min positive divergence on the open, it's no wonder the market moved up to fill the gap, remember I showed hints of accumulation in the Q's and DIA at EOD trade Friday, it seems a bigger plan was already in place.

 Here's  a 3C 10 min relative divergence on the open this morning, meaning locals bought the gap down and have been riding it up in a mini short squeeze from last night's horrible futures.

 The 30 min chart is still very negative and I view this as a short term tactic on the upside, as you recall last week I was expecting the DIA and QQQ to breakout before we saw a reversal; the Q's managed it, now sectors important to the Dow which were out of rotation late last week are suddenly in rotation today.

 The 15 min chart is clearly negative, thus the shorter term positive divergences are tactics, not strategy, the market is still in a dangerous spot, but the game must be played and the game is almost always a head fake breakout before a reversal.

 Here are two possible breakout points for the SPY, but I think the DOW is the bigger issue.

Here's the DIA and the breakout point, about 120 points or so away, still very doable.

Watch for the second part of this post.

An Example

This is an example of what Jim mentions in the video and what I mentioned about accumulation zones and locals spending some money to lower a stock back in to the accumulation area. Here's EDZ which came out of a bullish descending wedge and started trading laterally, which is an indication of building a base, even without 3C.

 This daly chart shows a lot more positive divergences then negative, it is an ETF that's been building a monster base.

However, the more detailed 15 min chart shows distribution to knock the ETF back down to levels where it is accumulated. They want to put together the position at a low average price and they can either sell some inventory to create a supply/demand imbalance or more likely, they can go short term short on the ETF making money on the way down until price s back in the area of accumulation. Jim talks about knocking down stocks and spending I think $8 or $10 million dollars to do it if I recall the video correctly, which is a drop in the bucket for a large hedge fund.

In any case, when I taught Technical Analysis for 3.5 years, I started my first class with this video. My students, once they understood what all the jargon was about, left the class severely disheartened, but I wanted to make it clear from the start what they are up against and why I don't watch CNBC. One they understood that all the Wall Street propaganda they've been sold over their investing lifetimes was a bunch of bull-carp, they could better align their thinking with the true nature of the beast. You must know your opponent. As it has been said, "Keep your friends close, keep your enemies closer.

Cramer in his own words...

I'm getting a lot of requests for the Cramer video which was on the Street.com's Wall St. Confidential hosted by Aaron Task. If you watch Aaron, he clearly gets a little uncomfortable with Jim's candidness. I think Jim Cramer is a smart guy and well connected to Wall Street, especially being GS alumni.

To put the video in context, this was released before APPL came out with the Iphone, you'll here a reference to a false rumor that is hypothetically floated about AT&T not wanting the phone, which was a major undertaking for AT&T to upgrade their equipment to handle the Iphone capability, so that gives you some sense of the time frame.

I just don't trust a word Jm says on Mad Money, I think he's carrying water for Wall Street and I've had major market tops called wIth 3C in which he was telling hIs viewers to buy, he's smarter then that, but it helps his Wall Street buddies unload a position in to demand that he creates. Furthermore, how often do you hear Jm talk about shorting a stock? You have to understand what CNBC is and what Mad Money is, they are a business, they aren't what many people assume them to be. As a business, when a CEO comes on and speaks, it's a paid infomercial more or less. If Cramer said short XYZ, do you think that EO would pay money to come on the show to have his company showcased? Remember, it's a business that derives income from advertisers and Cramer's friendships and connections are a lot stronger with his Wall Street friends then they are with his viewers. Just try to read the diagonal disclosure on the show! That alone should tell you something.

However, this is Jim taking the bait and opening up about the true nature of Wall Street. He even says in the video, "This isn't something I'd say on my show", meaning Mad Money. He also says if Fund managers aren't willing to "play the game", meaning engaging in tactics that fall along the gray lines of the law, "then they shouldn't be in the game."

One other concept is something you see on 3C charts often, in a lateral accumulation range you see negative divergences near the top of the range, that's Wall Street putting some money out to knock the stock back down so they can accumulate. Jm talks in some depth about spending money to knock the market down so they can profit from the move, this s the same concept as what you see in 3C charts.

So here's the video, make sure you watch and bookmark it because it's getting harder to find, it may just disappear one day. I think Cramer regrets giving the interview in retrospect.

HERE'S THE LINK

URRE Long Trade Idea Follow Up

URRE is a long trade idea with a long term outlook.

 URRE daily bullish price pattern

 3C VERY bullish 3C pattern.

The recent pullback in URRE. I would consider accumulating some URRE on this pullback, maybe not a full or even half position, but a little as it remans very bullish in the intermediate/long run and I believe even in the short run. This is one of the few stocks I think will rally during a stock market bear market environment.

Early Market Update

Whenever I call a post an "Early" Market Update, it generally means that the market is working through retail limit orders and retail traders and we have very little view of what the locals are really up to, other then fleecing the retail traders as is common practice in the morning.

The futures were down so far late last night, it's no wonder we are seeing a move into the gap. Retail traders almost certainly placed limit and market short orders before heading off for work Monday morning, after seeing last night's futures activity. I didn't bring you news of the future activity because it was in a thin market and not during market hours, thus it was very easy to manipulate and was likely being manipulated to run a play like we see in which the shorts are squeezed on a gap fill. As far as futures go, I almost never trust them and it's the best advice Cramer has ever given, but yet wished he had rather kept his mouth shut. Contact me for the video link of how Hedge Funds and others use the futures to manipulate the market.

 The DIA with a 1 min positive divergence on the open, it's starting to lose some steam, but between what was bought on Friday near the close and what was bought at the lows today, this gap play is already profitable for the locals.

 We see the exact same in the QQQ, average prices of Friday's EOD accumulation with this morning's opening prices, makes the gap play a profitable way to start Monday morning for the locals.

The SPY showing accumulation on the gap lower and it seems to be running out of steam. Remember, price can do 3 things, go up, go down or consolidate sideways. The loss of 3C momentum doesn't mean a reversal, it could lead to a lateral consolidation. Either way, it's still too early to see institutional movement, but as I stated Friday at the close, the market is in bad shape, we are close, if not at a reversal.

GLD/SLV Update

Last night you saw the GLD 3C charts

Here are this morning's relevant charts thus far...

 GLD 5 min negative divergence, GLD slips from the open.

 GLD 2 min leading negative divergence, this timeframe doesn't have lasting implications, but it's very negative disposition this morning fits well with the pullback in GLD since the open, there's an element of "sell the retail gap up".

 Here's GLD 1 min. also in a relative negative divergence, thus GLD has lost about 25% (as high as 33%) intraday and why last night I said I felt Gold would be a volatile and likely fruitful trading vehicle, but you must be able to watch it and move quickly in and out. I don't see this volatility letting up until the debt talks are resolved.


SLV

 SLV hourly chart is also still negative.

 As is the 15 min chart, although not severely so as we see in some of the major market averages.

 The 10 min chart negative on today's move higher. I feel we will see similar volatility in SLV  and GLD this week.

 Like GLD, SLV saw a 5 min negative divergence on the open, preventing it from moving higher and pulling price back.

The 1 min chart shows the same. I think the move in precious metals was overdone on limit orders this morning and we are seeing the Wall Street locals taking some of the excess retail speculation out of the game. I believe these two ETFs will see much more volatile moves and can and should be traded on a short term basis, taking advantage of that volatility.

I'll let you know when I see the next trade coming.

USO Update-

USO sticks stubbornly to support for a 3rd day, but refuses to move higher off the breakout move of Thursday of last week.

 This is the daily chart's bull flag with a 3-day long breakout above the top of the flag consolidation. Last week I mentioned that flags like USO typically have 5 points of contact before they breakout, as USO did.

 This is this morning's trade so far, once again testing support and finding support at the top of the bull flag.

 The 30 min chart suggests this breakout won't last in the near term.

 The 10 min chart agrees

 Yet the 5 min above and 1 min below show continued positive divergences at support.

Perhaps USO is waiting for  move is the Dollar Index, I really don't know why it's persistently sticking to support, but refuses to improve higher. Based on 3C, I've had a short term bearish view, but an intermediate term bullish view.