Just for fun

Here's the next Feeder Band from the hurricane bearing down on my position!!! The last one took some tree limbs down and of course we had the sideways rain that I've only seen in hurricanes, but we are just on the edge, no danger, I'm actually working outside on my porch watching it.

The arrows indicate the direction of the bands, the little red circle-THAT'S ME!

Market Update

I think the easiest way of conveying my expectations based on the 3C charts would be to say, "Take the GLD Analysis and flip everything".


I'll show you the IWM/QQQ as examples because they all look pretty much the same.

 IWM 15 min-Taken in the big picture, the IWM is making leading positive new highs, above last week's price highs, this is bullish.

 However when zooming in, you can see there's a 25 min relative negative divergence in the IWM and other averages, this suggest a decent move down.

 This 2 min chart is showing signs of improvement and perhaps the market will move up a bit here.

 However the 5 min chart is nothing more then inline with prices, no bullish disposition. This suggests to me that the market will make another lower low, probably today. I don't know if the market can or will go this low, but remember my expectation from last week when I said what we would probably see this week is a formation that looks like a "W" bottom and that has taken place already, but I also said that this formation in particular almost always gets head faked and makes a lower low on the second bottom, just like energy and financials did, the market didn't do it, but it would not surprise me to see it happen as it is what I expected last week along with the "W" bottom.

 Here's the QQQ 15 min chart, also with a relative negative divergence, suggesting a deeper correction then what we have seen thus far.

 Here's the 1 min chart, and this is showing the negative divergence yesterday and this is why I warned of weakness for at least the first half of today. Right now this hart is in confirmation with price, it's not bullish or bearish, just in line with price.

The 5 min chart however is in a leading negative divergence and this makes me think we will see another lower low, or a pattern that is similar to a bull flag, the opposite of what I would expect to see in GLD.

However, 1 day does not make a trend, I pointed this out when we were acting very bullishly, when I showed you we are still in a lateral range and I point it out now. The industry group daily charts from last night really surprised me, so overall  think there is a bullish leaning to the market, even though from all sources, Bernanke and the market are painted in a bearish corner, I've just seen 3C contradict the mainstream and prices too many times and come out on top. Back to browsing charts.

GLD/SLV Update

Yesterday I thought we'd see a bounce in GLD and SLV (a little stronger in GLD).

Here's the updated charts for today.

 This was the extent of the divergence yesterday on a 5 min chart. Today the 5 min chart has added to that positive divergence in the white box, it is a leading positive divergence.

 Even the 15 min chart was positive this morning, this implies a bigger bounce.

 We can see on the 1 min chart that the current bounce i running out of steam, but I suspect we will see a second bounce that carries higher then this one, forming something similar to a bear flag.

 The two min chart also shows this current bounce rounding over, but again, I think we'll see another attempt at a higher high.

 This was SLV yesterday on a 5 min hart, it added more positive 3C momentum today in the white box.

 And has made it to the 15 min chart today in a leading divergence.

While the short term looks the same as GLD, like this bounce is ending, I do expect the same for SLV as GLD, a second move making a higher high. I'll keep monitoring the situation, but I'd expect a bear flag to develop as a second higher high is likely made.

The Miners Trading System

Both systems are still long DUST, yesterday I warned that DUST was likely to pullback, but the longer term picture still looked bullish.

 This is the 50 bar 60 min moving average, where I thought DUST was likely to pullback to. I still think it could pullback some more.

 There's a hint of a 1 min positive divergence, I think DUST will have to pullback again for a second positive divergence to develop before it's a buy for anyone who sold yesterday at higher prices.

When the 5 min chart shows a positive divergence, DUST will likely be  a good buy/add to.

It's the Euro

Think that the IC report might be causing the market to drop? Maybe, but it's more directly connected to the Euro.

 The Euro makes up 50% of the Dollar Index, a falling Euro means a rising dollar, which is equity negative.

 Here's FXE (Euro Trust ETF)

And here's UUP (Dollar Index)

RIMM Pullback

 RIMM 1 min negative divergence-the pullback makes sense

 However, the following timeframes, 5 min above and 10 and 15 min below are in line, so unless the 5 and/or the 10 min go negative, right now it looks like this is only a pullback for RIMM.

 10 min

15 min

Remember these charts from last night?

And what I thought they meant for the market this morning...

 DIA

 IWM

 QQQ

SPY

"As for the market tomorrow, these charts may have not had enough time to catch up to the afternoon move, but I'm thinking based on these and the P/V dominant relationship, we see some pressure on the market tomorrow, at least for the first half of the day."

Isn't that somethng

This is the second day the market has ignored bad data, and Europe as well for that matter. I've said it before and it should be said again, "When Wall Street runs a cycle, nothing stops them until/unless they lose control of the market".

Today Initial Clams disappointed at 417k on expectations of 405k, the market may be ignoring it today, and it looks like what I've suspected for several weeks, Wall Street is running a cycle, but on the next eg down, this will be thrown n the discount mix.

Take note of financials, XLF up already +4% and BAC? Up nearly 20%! Remember that head fake? Buffet s said to be buying $5 Billion in BAC preferred, you think that wasn't known Monday (Merger Monday)?

Any way, I'm still here in typically sunny South Florida, where the Hurricane is supposed to miss us, but we just had the tail of a feeder band whip through with the sideways ran and all, with at least 30 mph sustained winds and tree parts flying everywhere, hopefully we'll keep power today.

It was quite something to see the European futures drive higher on a no win situation and then the US futures! If anyone has any question left about who really runs and moves this market, today you have your definitive answer.

Daily Wrap

I already told you about the internals pretty much, AAPL is going to be a fulcrum item tomorrow, I cant see nearly 200 major hedge funds all hitting the sell button at once, that wouldn't be good for anyone, but it will be worthwhile to watch the underlying action for the long term set up in AAPL.

We are nearing the Jackson Hole Speech and probably a revision to GDP that comes in with a minus sign n front of it. The banks have got their analysis out there and it's basically damed if Bernanke does, Damned if he doesn't, but we have to remember where that analysis is coming from.

I imagine thier will be volatility tomorrow with people wanting to get out or get flat before the JH speech. I have a few opinions of what may happen but that's irrelevaent. The only thing that is relavent is if there is an operation twist announced, it'll be good for financials and with the short interest in that sector, that could produce a pretty loud sonic boom to the upside. I found BAC's trade to be notable the last couple of days. Remember what I always say about a head fake almost always preceding a reversal?

Check out BAC...

 Right before the break of support, I was seeing positive divergences, support broke, volume spiked and I said, "I think it's a head fake" then today BAC rose over 11% and the area in white is pure short covering, notice there's no pullbacks. This has been the dog of financials, and it has a head fake then an 11+% day?

 Take a look at the 30 min chart of BAC, the head fake actually was a positive divergence-or accumulated and look at financials below...

Same deal, XLF saw a head fake on a very positive divergence and this is the sector that benefits most from OPT2 (Operation Twist 2).

Because of all of the safe haven buying, the Fed could actually sell some 10 years. The 2 years are untouchable because of the FOMC statement and policy of ZIRP through 2013. So what happens if Gold keeps moving down and the long are driven out of treasuries because of Fed policy, where doe that money go? Well the banks have done pretty well with risk assets like equities over the last few years of QE operations, phrases like "Perfect trading quarter " come to mind. And then we have my theory of what happens after Op-Ex Friday from last week, under that theory we still have a short squeeze to drive out the shorts that entered on the "sharp sell-off" that I mentioned last Wednesday.

Here are some other charts I found interesting

Treasuries 

 IEF 7-10 year TreasuriesWe know there's been  lot of safe haven buying is T's over the last few weeks, but this 30 min chart is just fiercely negative.

 IEI 3-7 year Treasuries, this 30 min chart is just as nasty if not a bit more.

 TBT-ULTRASHORT 20 Year Treasury, this 15 min chart has recently taken off nearly vertical.

 TBT 1 mn and there's 1 min confirmation through the last several days.

 TLH 10-20 year Treasury Fund, again another negative divergence on the hourly chart.

 TLH 30 mins-same thing

There was a positive divergence on this TLH 10 min chart, which makes me wonder f the market will be off tomorrow and we'll see some safe haven buying. We never did get that head fake that I had expected.

And now some VERY interesting charts in the Industry groups...

 This chart is actually one of the last  I captured, I started looking at the intraday charts of industry groups, it never occurred to me that there could be action on the daily harts, WOW was I surprised! This is XLE on a daily chart (Energy).

 XLE hourly

 XLE new leading divergence 15 min

 XLF daily-a small leading divergence (for newer members, the longer the timeframe, the more meaningful the chart and the bigger the implications of the signal.) Daily

 XLI Industrials- Nice leading positive divergence (Daily)

 XLK Technology, a pretty spectacular relative divergence (Daily)

XLP-Consumer Staples -a parabolic leading divergence to new highs (Daily).

I've been watching the indices so much and the intraday charts because  felt this action was rather new, I didn't think to look at the daily charts of the Industries. I want to stay nimble through this Jackson Hole Speech, but this is almost like a new discovery that has really taken me back. I obviously have a lot of charts to look at in light of these industry group daily charts.

As for the market tomorrow, these charts may have not had enough time to catch up to the afternoon move, but I'm thinking based on these and the P/V dominant relationship, we see some pressure on the market tomorrow, at least n the first half of the day.

 DIA 5 min

 IWM 1 min

 QQQ 10 min-fits with that treasury chart on the same timeframe.

SPY 5 min.