Earnings Play Monday After-Hours -PCLN, HGSI and AMRS

OK, we are pretty close to the EOD, so here's what I see thus far...

PCLN...

 The 1 min chart didn't tell me anything today, I wish it did.

 The 2 min chart today is slightly negative, but this doesn't stand out as an earnings leak to me.

 Longer term the 2 min chart is very negative as I showed last night, but the truth is, this doesn't look too much different then the QQQ, so I'm guessing this is more general market related then earnings, although that certainly is part of the general market tone. The 15th seems to have been some sort of breaking point event, it is noticeable in quite a few stocks, not the least of which is AAPL.

 The 5 min chart hasn't told me much, it is more or less in line with a slight hint of a little positive the last few minutes.

 Longer term on the 10 min, there does appear to be selling, I just can't say it is earnings related.

 Same with the 15 min chart

 And the 30 min, again the 15th seems to be some transition.

Overall on the 60 min it is negative, but this wouldn't be a reflection of an earnings leak, I would say just overall market distribution. I would not pick PCLN as an earnings play, but the stock does look like it has a problem.

HGSI is a little different, this is a bullish play.

 The 1 min chart didn't fall with HGSI today, that is bullish.

 Longer term 1 mi seems like it has been under accumulation for some time.

 The same with the 2 min

 Today the 5 min chart went leading positive on a move down in price, this is bullish.

 And long term 5 min

 The 15 min chart has a strong positive divergence

 As do the 30 and 60 min

I'll update AMKR after this so I can get this out to you. I personally would consider HGSI an earnings play on the long side. The only thing I am concerned about is whether this is earnings related or a drug in their pipeline, the difference would be timing. It's like the RIMM long earnings play we took and they dropped 9% on earnings, but the accumulation was real and they replaced their CEOs a few weeks later and we eventually made a decent chunk of change on the trade holding from earnings.

All in all, I like HGSI the best.

AMKR coming up.

Credit/Risk Assets and more

 Commodities vs SPX (SPX is always green unless otherwise noted), commodities have definitely had a good run the last few weeks, led by crude.

 Intraday today there's a little weakness in commodities vs the SPX as USO is down a bit as mentioned earlier.

 Long term commodities are severely dislocated , you can see when they were in line with the market as a risk asset during the 2010 rally, then they signaled the top in 2011 with a divergence and now are at a severe divergence again, refusing to follow equities higher in the risk on trade in equities.

 As I have mentioned several times, High Yield Credit hasn't made a higher high since the 6th, 3 trading weeks of selling off relative to the SPX.

 And locally today, Credit didn't follow the market, instead it went the other way.

 Rates are like a magnet for equities, you can see them hitting new lows today, not rallying with stocks, longer term they are at multi-decade lows.

 I changed the symbol here to USO just to see how it was performing today vs the SPX. Again, it may be a blip, but today's action in USO should be watched.

 Financials have been deeply unimpressive during this last run as you can see in red.

 Even though they have been lagging, they did go in to rotation in January as can be seen here.

 This is XLE/Energy, again I just wanted to see what it looked like vs the SPX, as you can see, not performing well.


 Here's a recent change in character in financials since they came in to rotation, you can see they are underperforming and look similar to the Dow-30/Dow-20 Transport divergence.

 This is XLF intraday today, which has been pretty much in lock step with the market as you'll see in sector rotation.

 Financials are at the bottom and you can see they are in rotation today or at least outperforming, Utilities have dropped off as you would expect with flows in financials today, Healthcare looks as if it may be hitting a low in its rotation and may move back in to rotation, this would be defensive market action. Energy, which has been strong the last few weeks is clearly off its game today. Industrials seem to be sliding a little, while Tech is doing better today then Friday afternoon, it is still one of the weaker groups relatively speaking, Discretionary is completely falling off.


A member mentioned a correlation between the market and FCT which is a floating return income fund. I did some research and compared it to the market and indeed it has called some tops such as 2007, 2011 (July specifically) and is in a relative negative position and losing momentum quickly.

 In red FCT warned about the July 2011 decline seen at the red arrow, on a relative basis, you can see how it has underperformed the SPX by the associated trendlines. I didn't have time to put together a rate of change for both, but the charts below show the momentum fade.

First FCT hasn't been looking too hot the last week or so with Friday being a bearish engulfing candle.

 Looking at the early part of the rally from Dec. 20-Jan 23 we have a nearly 9% return, which is more then the SPY's 6% return below for the same period.

 SPY...

More recently from 1/23 until today, we have a 1% return in FCT...

Compared with a 4.21% return in the SPY for the same period, so 2 things stand out, one FCT seems to be a higher beta fund then the SPX which you could see in the early trend momentum, second the relative performance or ROC has fallen off dramatically and in the large scheme of things, it is divergent with the market.

I'm not sure what is behind the correlation, but it seems pretty solid from looking at past charts.

URRE Long Trade Update

 Here's the big picture again and the typical "new" bullish descending wedge behavior (unlike what Technical Analysis has defined this pattern to be for nearly a century). As you may recall, these bullish wedges "use" to break out at the apex of the wedge, you can see a false breakout in yellow-I also suspect that is the area of resistance that will mark a stage 2 breakout.

 The recent bullish ascending wedge consolidation may have had a little shakeout below the lower trendline, but a daily bullish reversal hammer is forming, if you like this trade but haven't had an opportunity to get in to it, today may be that chance.

 Since we first noted a bullish change in character, I have said, all I care about is that URRE keeps a generally rounding bottom shape as you can see by the 22 day moving average and that volume pick up on the right side of the pattern, so I'm satisfied with URRE's price performance thus far as it was what I was looking for long before the rounding pattern was even present.

 Short term 1 min chart seems to show a positive divergence today (which is forming a bullish hammer reversal candle).

 The 5 min chart is also showing positive divergences.

 And the 15 min chart looks good overall.

As does the hourly chart.

I'd sum up URRE as so far so good and today looks like a decent area to add or initiate if you like the trade long.

Update

 So far it looks like the Euro did try to kiss that pattern good bye and is starting to turn down, I'll feel better on a new low.

 The SPY, DIA , QQQ and to a lesser extent, the IWM all have this interesting candle with a long wick on heavy volume-the long wick represents higher prices being rejected and combined with heavy volume and no price gains, is often bearish churning.

 The DIA

The QQQ

The Earnings Plays

Of the 3 highest probability plays, AMKR hasn't flashed any interesting signals, I didn't see much in PCLN which I was leaning bearish on last night until I checked the 5 min chart, that is a little interesting.

HGSI which was a bullish slant has shown more then the other two, but here are PLCN and HGSI thus far today (they report after the bell).

HGSI

 Even though HGSI dipped today, the 1 min chart didn't make a lower low and has held up. That's not a major signal, but taken with the 5 min chart below, it's looking better.

 The 5 min is leading positive in to a dip today, thus far I like what I see and was leaning more toward HGSI last night, we still have time though as GOOG didn't show its cards until 15 mins. before the close.

PCLN

The 1 and 2 min charts in PCLN don't show anything, but this 5 min chart shows  weakness in to today's move in Friday's range.

I'll keep watching and let you know if anything changes.

EUR/USD (Euro)

 This is the ascending triangle (which is a bullish continuation pattern) in the Euro (EUR/USD), as you can see it has broken down. There are far fewer head fakes in currencies then equities, but until it really turns, you can't rule it out.

 It has definitely killed market momentum

 This 5 min chart of FXE (Euro) is showing some weakness that is bleeding through from the shorter charts below.

 FXE 2 min

FXE 1 min.

If this keeps up, it looks like the Euro's last run may be ending here which will put pressure on the market and probably commodities as well such as GLD/SLV and perhaps USO.

USO has had a break today, I'm not making much of it as it is just a day, but it's worth noting and keeping an eye on.

The one thing that makes this move in USO a potentially interesting one is the "channel buster" or break out of the channel on the upside, many times when this happens, although it looks bullish, it leads to a reversal. It wasn't a huge move, but it was a well defined channel. It is worth noting as I said and keeping an eye on.

As for the Euro, I'd expect it tries to maybe kiss that triangle before moving lower, however as I noted above, until it does make a break lower, a head fake can't be ruled out, although I suspect it is probably a genuine break.

Treasuries...

If you're not up to speed on the trade in treasuries, last Friday's post covered it pretty well.

We first noticed late day Treasury buying even as it was still trending down (this was interesting because this is the time of the day when the pros are most active). Sure enough it led to a reversal in the short term trend, but Friday's post shows a reversal was under way long before last week.

 I have pointed out the last few days that Treasuries have been rising despite the market as they have a traditional inverse relationship.

 Here are treasuries in green, the SPY in white, you can see the inverse relationship, so it is strange seeing treasuries bid even with the market. There's not much of a yield so it seems more like a flight to safety trade.

 Today TLT is up almost 1% and did not move down when the market bounced. TLT isn't exactly a high beta ETF so to see it up so much is again, strange, but it should be viewed as a hint and a piece of the puzzle.

 This is the long term 3C chart showing treasuries about to reverse and then something changed and they started seeing a long term positive divergence, almost as if Wall Street changed their mind right in the middle of what was to be a decline.

And the positive 15 min divergence I highlighted last week that has lifted TLT/Treasuries...