FSLR Earnings Tonight

I wish I could say this REALLY looks like an earnings play, I can't, but I can say in broader terms that something positive seems to be going on here and before the close, maybe we will get that earnings signal like GOOG did 15 mins before the close and earnings.

 Broadly speaking, there have been what look like a couple of capitulation events, basically throwing in the towel so the weak hands are knocked out of the stock.

 The daily 3C leading positive divergence and TSV positive divergence indicate something positive is going on here.

This leading positive divergence on a 15 min chart in the last day and a half is what peaked my interest in FSLR as a possible earnings play.

Earnings or not, I think the stock has upside potential.

Dow Full Update

Today intraday, the Dow seems like it will test $13k

Over the last 5 days, I count (eye-balling the chart) at least 17 times price has crossed above the $13k level, not to mention how many times it has crossed below, so if we were playing the drinking game, we'd all be darn drunk. Strangely, there's VERY little volume at crosses above or below, I know traders are about as superstitious as they come, maybe the 13 is spooking them. In any case, this would normally be a major breakout, the reaction has certainly been strange.

DOW 30 (green) vs Dow -20 (red)

 Intraday you can see the DJ-20 has offered no confirmation, no support to the Industrials.

 Here's the divergence on a 15 min chart

 And on a daily chart, notice how they are usually very much in sync, the only divergence previous to this one was when the DJ-20 declined at the July Test and the market dropped viscously.

 3C intraday today, we see the positive divergence around 9:45 mentioned earlier and in line trade with a slight negative bias.

 The 5 min chart looks worse...

 As does the 15 min chart that bounced off support and a positive 3C divergence in white.

 The 30 min above and 60 min below show how bad the divergence really is, it may seem "out there", but it's no worse then the risk asset divergences.

Below is a daily chart.

3C called the July decline as well as the August bottom and did so several days in advance when everyone else thought there was no bottom in sight. 3C also called the strong October rally, this weekend I reviewed the posts from that time and we were looking for a new low followed by an extremely strong rally several weeks before the October new low and rally, then we were looking for a strong head fake move to be followed by a very strong decline-so far everything has worked out as we saw it weeks before the new low except the last step which I still firmly believe is coming as even the daily chart is negatively divergent.

It's not just 3C, but Money Stream on both the DIA and Dow-30

 MS DIA daily negative divergence

 MS Dow-30 daily negative divergence

GENRAL TONE

Thus far it's fairly flat and dull trade with the exception of the NASDAQ 100, the R2k is at .08%, the SPX at .31% and the Dow-30 at +.20%. I heard someone else say traders should play a drinking game, every time the DOW crosses above or below $13k you drink.

Commodities are showing modest improvement from yesterday's late day wash out, led by strength in the PMs, copper, not so much in Steel, Coal, and slight strength in USO (+.39%)

USO

 USO is still hovering around the lower channel -remember the channel buster I mentioned as it happened,  I said that although it looks bullish (and at that point we didn't know, it could have launched parabolically like a rocket), more often then not, it leads to a downside break of the channel which is exactly what happened-there's a tool for your tool box.  I have a half completed scan using Stochastics and Linear Regression Channels to look for these channel busters as they tend to be pretty reliable trades.

Commodities intraday vs the SPX

 One of the reasons I post these charts is because they are risk assets and should move with the market, they can also be leading indicators giving us a clue as to the market's plans when they diverge either bullishly or bearishly. The red box is yesterday afternoons break in commodities.

 Here's a multi-year example of what I'm talking about, while the positive divergence in commodities in 2010 at the far left looks small, it was over the course of a month, so it would have been very obvious at the time. Then commodities confirmed the 2010 uptrend in the SPX, then in 2011 the diverged negatively and sharply right at the test at late July , the market fell over 16% on that com
modity divergence. They marked a short term top in October/November last year and have been extremely dislocated or negatively divergent with the SPX since. I view this as a serious red flag.

Yields/Rates, much like Credit, are also leading indicators.

 Here on a nearly 3 week chart they marked a pullback on the 15th in the SPX, they started making higher lows before the SPX in to the 16th and again on the 23rd (white arrows), however the more recent trend has been leading lower. Below is a longer term example...

 Rates warned at the July test that sent the market down 16%, they also called the October low before the market and since then have remained extremely negatively dislocated from the market, actually at multi-decade lows.

Browsing through some of my watchlist stocks, I saw APOL being decimated, I jumped to the sub-industry component stocks and saw the entire group of education is being taken to the woodshed today. There are several names here that may make for interesting shorts on a gap fill and several others that look pretty good right now. If you do enter any of these, make sure your risk management treats multiple trades in the same sub-industry as 1 trade.

APOL

 This is one I would wait for a partial gap fill as the risk/stop level is just too far away, but there's something ugly going on in the group.

CECO

 Any entries would be under the same conditions as above...

EOMC

 This is already ugly with a bearish break away gap and a rare one at that too., I could see taking a shot at this with a stop just above this week's intraday highs.

ESI

 I would want to see some gap fill here as well for risk management purposes, although this could turn out to be a breakaway gap.

LOPE

 A slight bounce here would be intriguing, I will point out this made about a 1 year intraday high yesterday before dropping today (head fake).

APEI

 I could see taking a shot at this with a stop above yesterday's highs.

CPLA

 This is another I could see taking a shot at here, there was a high volume break away gap (a little small) and then a bear flag that rounded over, there are quite a few choices for potential stops in the area.
STRA

Here's another breakaway gap and just eyeballing it, it looks like it wasn't filled, then a bear flag and a heavy volume break from that bar flag, I like this one too, but any strength would be great to short in to.

This sector all around looks to be in trouble, not just a couple of stocks.

GLD looks like it may be turning here, I'll update that separately.

XLE/Energy is turning and on some volume, I'll update that as well.

DJ-20-Transports continue to diverge with the Industrials and are red on the day.

Treasuries may also be turning, they are just crossing up in to the green.

I have a couple of earnings stocks that I'll be looking at today and a long watchlist of some bullish and bearish stocks that have been just a matter of tactical entries. The bullish stocks tend to be rather cheap, perhaps Cats and Dogs, but there are several that look intriguing.

I'll post further updates and trade ideas that are tactically close to an entry.

SPY Update

I want to show you the opening trade as well as the current, but especially the opening vs yesterday's

 Here is today's 1 min positive divergence around 9:45, you can see it is starting to lead negative a bit, but thus far on the 1 min chart only intraday. Now compare to yesterday's below...

There was a negative 1 min divergence on the 24th that sent the market lower and the 27th we had what really wasn't a very big positive divergence that sent the market higher intraday (keep in mind this is pretty much intraday moves on the 1 min), but look how much smaller today's is then yesterdays. The leading negative component is more visible on this chart. I'm going to check the other averages.

Trade Idea- SJM (Short)

I like the looks of this chart and I like the potential trade set up, it's lower risk and higher probability.

 Here's the weekly chart and long term trend line.

 The daily chart shows the real trouble, a massive break away gap on huge volume.

 I highly doubt this gap gets filled, but even if it did, you wouldn't be in the trade. There's resistance coming up around the blue 200 day moving average which is also starting to roll over and resistance at the yellow 10-day m.a. which has tracked SJM fairly well, still, this is a "show me" trade as far as the entry goes.


 Money Stream has plunged after going negative before the breakaway gap down.

 Here we see the bounce off of the long term trend line on declining volume and smaller candles, the idea would be to wait for a reversal confirmation before entering, that could come any day, but one scenario would be a bearish engulfing candle which I drew in red as today's candle thus far shows a loss of all momentum as it nears potential resistance areas. This reversal candle is the "Show me" aspect of the trade and increases your probabilities as well as putting you close to a natural stop which would be just above the recent highs.

 Here's the longer term intraday (30 min) 3C chart which went leading negative before SJM gapped down.

 The 15 min chart is already going negative as resistance areas are approached.

 Clearly the 1 min below and 5 min above are quite a bit weaker and that is what is bleeding in to the 15 min chart.

So it looks like we are very close to a reversal day as momentum runs out and negative divergences get more serious. All that is left is to see a reversal start in the trend and place a stop nearby at the recent bounce highs. I would set some price alerts just to remind you as will I.

Speaking of Pair Trades-GALE/QCOR Update

On Feb 2nd I mentioned a pair trade between GALE (long) and QCOR (short), both are in the same sub-ind. group, Biotechs.

GALE was at $.72 and QCOR at $34.34, the idea is to hedge each trade. As of today, GALE is up 78% and QCOR is down 16.7% for a net +61% gain in less then a month.

QCOR is definitely volatile, but still a decent looking short, GALE allows the hedge of QCOR and a profit on the pair when the sub-industry group goes in to rotation as the second most powerful force on an individual stock.

 GALE Daily

 QCOR bounced off gap support and is heading in to its downtrend resistance line today.

QCOR chart as it hits resistance.

As QCOR backs off resistance and starts the next leg down, we'll likely have to adjust the GALE position, again sector rotation is the second most powerful force on any given stock on any given day.

Consumer Confidence Presents a Very Mixed Eco-Bag Today

Durable Goods was the Horrible report, Case Shiller was the bad, Consumer Confidence was the great report.

Here's the CC from 10 a.m.

Released On 2/28/2012 10:00:00 AM For Feb, 2012

	Prior	Consensus	Consensus Range	Actual
Consumer Confidence - Level	61.1	64.0	62.0  to 67.0	70.8

So Consumer Confidence comes in nearly 7 points above consensus and a big tick up since prior.

A truly mixed bag.

In Europe, the LTRO just began, results will be announced tomorrow. The data from the last LTRO shows banks who took the money (like the F_E_D's discount window 2008) have been punished by the market, so it will be interesting to see what banks pop up as having participated and perhaps there's a trade or two in there, I'm thinking specifically pair trades between those who did dip and those who did not (long / short).

URRE Trade Management/ Update

Yesterday I posted this update in which I thought URRE was in a good position to enter a new trade or add to.

It is actually still in decent position for either case, but yesterday was the best timing. Even if you are not in the trade or interested in it, there are a couple of lessons to be learned in the recent charts.

Here's the bullish ascending triangle, yesterday we had a shakeout below the triangle's support, it was an ideal place to buy as the shakeout was used to accumulate shares from those who stopped out on a break below a popular consolidation pattern. I always talk about looking for subtle changes in volume, the big volume spikes are obvious to everyone and yesterday we had an increase in volume, combined with a bullish candle like yesterday's, these are more often then not reversals and today URRE is moving back in to the triangle and up nearly 3%.

 The subtle daily volume was more apparent on an intraday chart as a washout with a large volume bar intraday on a long lower wick (bullish) candle.

 These are just shakeouts in both directions, the first was an upside shakeout on a bearish "Shooting Star Candle" on heavy volume, this would be similar in consequence to our Price/Volume relationship of close up and volume down, except it was in reverse, the candle was bearish while the volume "appeared" bullish, the true name for this is "churning" and often leads to a short term reversal (although on a 5 day chart, the same candle would likely lead to a longer term reversal in trend) so make sure you look at as many timeframes as possible, what was not very obvious on the daily with the subtle volume change, was obvious on the intraday chart. So now they have shaken out the pattern to the upside and downside.

I was going to say it's like bouncing back and forth between extremes of Bollinger bands, but I decided just to show you the BB chart so you can see for yourself.

(Click on the chart for a larger view)

 The pullback was accumulated, this is what we want to see and was obvious yesterday as well.

 Even the longer term charts show accumulation on this shakeout, like this 15 min chart...

 As well as both the 30 and 60 min charts, so it was a strong signal on the shakeout.

Even though yesterday was the best timing, in the larger picture for URRE, an entry even today is not out of the question.

Case Shiller Misses, Keeps Pressure on ES

The 20 city home price index missed in all 3 components...

Released On 2/28/2012 9:00:00 AM For Dec, 2011

	Prior	Consensus	Consensus Range	Actual
20-city, SA - M/M	-0.7 %	-0.4 %	-0.6 % to 0.0 %	-0.5 %
20-city, NSA - M/M	-1.3 %	-0.7 %	-0.9 % to -0.1 %	-1.1 %
20-city, NSA - Yr/Yr	-3.7 %	-3.7 %	-4.1 % to -3.0 %	-4.0 %

The 20 City Index had a slight miss of -.5 on expectations of -.4, the month to month rate of contraction of course missed as well at -1.1 on consensus of -.7% and the year to year rate of contraction is at -4.0 % on consensus of -3.7%

Next up is Consumer Confidence at 10 a.m.

Durable Goods Miss Sends ES Down 4 Points in 15 Mins

There was a 3C negative divergence any way, I figured we'd see a gap up and a move down as intraday volatility seem to be the game for the HFT, but the Durable Goods report just gave them a day's worth of movement in 15 minutes.

Released On 2/28/2012 8:30:00 AM For Jan, 2012

Prior Consensus Consensus Range Actual New Orders - M/M change 3.0 % -0.7 % -2.1 % to 0.5 % -4.0 % New Orders - Yr/Yr Change 0.3 % -1.5 % to 1.4 % Ex-transportation - M/M 2.1 % -3.2 %

This is a pretty bad miss, prior was 3.0% with consensus of a negative at .7%, the actual was -4.0% which is -1.9 worse then the worst consensus downside range. It's even worse considering the prior 3.0 was revised to 3.2, so we just saw a -7.2% drop in durable goods. This is not only the lowest number since early 2009, it's the biggest m/m drop since the same.