Keep an eye on Tech

Tech looks close to turning, although I'd rather see it later in the day, it looks like it will take everything with it, yes, even AAPL.

FB Update

I'll be adding to the equity long in FB that I started, I'm phasing in to the position and will probably add about another 1/3 of total position size here.

 FB 1 min positive leading

 3 min positive leading

 5 min positive leading

 And this is why I'm ok with going as big as 2/3rds position size here, just as with tops, double bottoms often see the exact same head fake move below support, plus the leading divergence is only stronger at an area they could have picked up a lot of shares on the IPO lockout passing.


The 60 min chart at a "W" like base which is what I suspected would happen from the first bottom we saw, a larger base would form.

BIDU as Tech Example

I suspect the tech sector will go ll at once, so when XLK goes, stocks like BIDU, GOG and yes, even AAPL are likely to go.

Here's BIDU, you remember the slight intraday positive has moved it up a bit, an ideal entry would be in the yellow box, from there we want to see a move below the lower trendline, this will start to serve as a head fake move confirmation and help downside momentum.

Tech Sector Update

It looks like GOOG is not the only tech stock to be watching for an early day head fake move, it looks like it may very well be sector wide.

While market directionality is the strongest force on a stock, the sector directionality is the second strongest force.

The head fake move would be in yellow on the daily chart.

Here's a couple of areas to watch intraday, see the volume? Retail is biting.

 The 1 min negative

 3 min worse


 5 min even worse

And 15 min worst, but the point is timeframe alignment at a naturally suspicious area. I think XLK can be watched more broadly for timing on individual tech names.

GOOG

Keep GOOG on your radar, this one may be coming up shortly.

 This is a good example of what I often say, "Head fake moves before reversals appear on all timeframes", here we have a probable daily head fake move in yellow and...

Intraday another at a triangle, a common price pattern, look for the move below the triangle and below the intraday support.

USO Interesting here

USO might make for an interesting short or add to position right here...

There's a chance it fills the gap, the market had been very diligent about filling gaps last time things got wobbly, but even here it's looking like a very interesting candidate.

 I believe the longer term charts were in the last update, so USO saw a little intraday bounce from a rather weak relative positive divergence, this is pretty normal intraday volatility especially earlier in the day, but is providing an interesting entry here.

 As you go through the longer intraday timeframes, there's no strength there, no relative positive even on the 2 min.


3 min in line, with the longer term charts ugly, they'll act as an anchor.

BIDU Having a Rough Morning

 BIDU 15 min chart with this a.m. highlighted.

 Here's the daily chart with the down trend, the head fake lows we identified, we expected a counter trend rally which BIDU has retraced 50% and then look at the very clear resistance of the last 2 weeks maybe and the head fake breakout.

 Here's a closer look on a 30 min chart, resistance at the white line, when the red trendline is crossed, many longs will be at a loss, this is why head fake moves before a reversal are so common and effective, this also shows the larger trend in BIDU being a 30 min chart, these are the kinds of signals I take, I can't ignore a 30 min chart looking that bad. Sept $130 Puts are green this a.m.

 The 5 min chart and the break down of a head fake move, whenever there's a change in character of trade, you have to pay attention to it, like in the yellow box, extreme volatility/shakeout.

 Intraday there's a slight positive divergence, maybe a n intraday oversold bounce, it really doesn't mean much to me, but BIDU is still in good position to consider as a short or add to.

 The 2 min chart sees a little of that divergence from the 1 min

Nothing at the 3 min, as of now, any intraday price strength could be used for tactical entry advantage.

USO Update

I like what I'm seeing in USO

 USO stops hit this morning

 The bigger picture, the 30 min chart leading negative at the breakout area, the same theme seen market wide over and over whether in 3C, breadth indicators, Risk Assets, etc.

 1 min intraday looks like USO will be making another leg down soon.

 2 min in line, trend confirmation

 3 min in leading negative position as 3C makes new lows

The bigger picture on the 15 min chart as well, the same theme seen in breadth readings as resistance was broken and indicators fell apart after.

Market Update-Mixed Weakness

The QQQ and IWM are looking the worst as the early a.m. trade burns off.

 The DIA looks to be the second strongest among weakness, but even this 1 min positive divergence is already turning down, I thought maybe a gap fill, but being this 1 min is falling apart and there's nothing behind it, maybe not.

 2 min has no divergence, no strength.

 IWM 1 min is very weak, just a slight positive that could fail any minute.

 2 min looks bad too.

 QQQ 1 min with a slight relative positive, not strong

 Nothing at 2 mins at all.

 SPY looks the best, but this is even starting to lose traction since the capture

The bigger theme is weakness.

Over the Weekend and In To the Open

The big news or really the only news of consequence was an un-sourced story this weekend in Germany's Spiegel in which they reported the ECB was going to vote on a bond buying program that set caps for PIIGS countries, for instance, they would buy if Spain went above 7% for example and keep buying until it came back below 7%-s an example. This news alone sent the Spain 10-year debt to 6.3% overnight, it had been a full point higher less than a month ago at 7.3%.

As is almost always the case in the EU, nothing un-sourced like that remains unchallenged very long and after the European open, the German Finance Minister said he was aware of no such program being proposed by the ECB; in addition the very influential Bundesbank said AGAIN, that the bank DOES NOT support any new government bond buying by the ECB and that any bailout loan have strict conditionality, such as that Spain has already outright rejected.

The bank added that risk solvency risks should be handled by parliaments and not the ECB, that ECB buying would create instability (there is some question how much larger the ECB's balance sheet can grow and when they tried this last year with Italian bonds, the results were poor).

Following the German response to the Spiegel article, the ECB itself came out saying that bond yield targeting has NOT been discussed by the council, that it is misleading to report on decisions not yet made, and that the ECB will strictly adhere to its mandate. By this point the S&P Futures were off their best levels of the overnight session and after the European open.

Furthermore, the hope that the PBoC will enact another RRR is not seeming very likely as they are doing just the opposite by carrying out Reverse Repos in an effort to try to contain food inflation. As I have mentioned many times, it is purely the hope of Central bank easing that has kept this market up, now the PBoC is restrained by inflation, the ECB has refuted rumors from the weekend, Germany strongly opposes any such measure and the last CB, the F_E_D has its Jacksonhole meeting in 10-days, with gasoline prices climbing, it seems very unlikely they will announce anything along the lines of easing with an election coming up. Hope is now looking less hopeful.

Also contained in the Bundesbank monthly report released this morning, they believe German may be hit hard for Q3 de to the Eurozone crisis, so they may be attempting to lower expectations.

With there being a lack of tier 1 economic data on either side of the pond today, it is likely that this article from Siegel and continued responses to it will drive trade the rest of the day, thus far, not looking good since the article has been denied with ES moving from an overnight high to a pre-market low, but we aways see some momentum either way on the US open.

Here's ES

and the EUR/USD since the FX markets opened for this week.