Market Update

You can compare this update to the last update, basically some shorter timeframes went positive, there hasn't been much migration of the divergence so it still suggests the market is just being kept in a range, not allowed to go too high or low, the only exception may be the DIA which has been positive on the 5 min intraday.

 DIA 1 min positive that recently developed, I think there were hints of this on the last update.

 The 3 min DIA is not seeing migration of that divergence, thus I think we are seeing some manipulation to keep the market in an area before the F_O_M_C.

 Here's the 5 min leading positive in the DIA I mentioned, this may very well be a different story than the "treading water" we see in the shorter timeframes, I need to look around more to try to confirm this.

 QQQ i min was largely in line most of the day since the negative open and then just saw a big/fast leading positive divergence with AAPL develop quickly.

 However no migration as of yet to the 3 min chart, again suggesting small investments or accumulation (and distribution) are being used to just keep the markets treading water.

 SPY 1 min also went leading positive very quickly, before I could get these charts captured and out.

 There's some migration in the 2 min chart.

However not in the 3 min chart, maybe we will see it develop, but my gut is still, "Treading water in front of the F_O_M_C".

I'm going to be looking to see if there are any areas that look like strong candidates for positions before the F_O_M_C in about 1 hour and 20 minutes.

AAPL Update

I couldn't get this AAPL update out fast enough as I saw the positive divergences intraday and started capturing the charts, then AAPL started to move. In any case, it's likely more chop intraday or treading water, but I remain long the AAPL calls for the short term and will be looking for an opportunity to short strength in the near future.

Several market averages are also showing some strong intraday positive divergences here as well that just developed.

Here's the AAPL update.

 AAPL 1 min relative positive to a leading positive

 2 min with a decent size relative positive after the opening negative divergence.

 Same with the 3 min except the positive is leading.

 5 min also negative on the open, leading positive now, obviously migration from the 3 min chart above.

The overall 30 min chart with relative positives as well as some leading positives, it should be enough to get what we are looking for from AAPL on the upside barring the F_E_D just totally upsetting the APPLE-Cart.

FB Update

The FB 3C action is not surprising at ALL, this is why I mentioned taking "some" profits on the early opening move and look to add back those shares at lower levels. Smart money IS NOT chasing FB higher, smart money has been in FB for a while as we have seen and know. This is short covering and profit taking, smart money will likely wait for FB to settle down, for the shorts and weak hands to move out before it makes another big move higher.

I only need 2 charts to update FB

 The 2 min is showing a negative divergence on today's move higher, other intraday timeframes are negative as well, this is not anything that I worry about, it is what I would expect to see.

This is smart money, they were in long before this move higher and they certainly can't move out of a position this large in 1 day so I do expect additional upside in FB, it will just need some time to shake lose the short covering and weak long hands.

Our longer term expectations for FB is going better than even I imagined. In my opinion, FB remains a longer term trade, not quite an investment, but not a trading stock either, this is one I opened and put away and have not been hung up at all in any moves up or down either intraday or over a period of days or weeks, the longer term charts are there, that's where my interest is as I said yesterday.

Market Update

Basically looking at the intraday charts, it looks like the market is treading water, with the F_O_M_C today that makes sense, 100%.

 DIA open in the red box on the 1 min, even though there are some positive divergences here, I still expect chop.

 DIA 2 min open is at the red box, which was negative, again just chopping around.

 DIA 5 min has a positive divergence here.

 QQQ 1 min negative at the open, in line all morning and just seeing a small positive divergence here.

 QQQ 3 min negative at the open, in line all morning, the 1 min chart has a positive that just started so it wouldn't show up on this longer chart yet.

 Same on QQQ 5 min, negative on the open, in line since.

 SPY 1 min negative on the open, mostly in line all morning

 2 min negative on the open, there's a positive divergence developing here, probably more chop.

Same with the 5 min chart.

As I said, this looks like a holding pattern.

UNG

I think we are starting to see why UNG had such a dramatic change in character, why it is one of our better performing longs and why it is still in a base and looks like it has a LOT more upside, in fact it doesn't even look like it has started its move yet.

One of the first hint other than what we saw on the charts was Bernie's semi-annual Congressional testimony when a congressman asked him a question out of left field that really had nothing to do with Bernie, the F_E_D or anything they were talking about and certainly wasn't Bernie's area of expertise; what it was however was a forum to plug Natural Gas while a world of investors were closely listening to the event. The question had to do with North American Energy independence and specifically was related to how natural gas could further our country's economic prospects, or in other words a shameless plug. Since watching the debates, it seems clear the Energy independence is a platform both candidates are running on and natural gas seems to figure quite high in the equation with either candidate. Obama's administration passed a law that would essentially make it impossible to build any new power plants from anything other than Nuclear or Natural gas, clean coal wouldn't even meet the standard, so long before we had a clue as to why UNG was shaping up, we saw the accumulation there and followed it, had we waited we wouldn't have a decent profit right now and good positioning.

As far as those who want to add or enter new positions, I would say, "Patience". To me it looks like UNG is in a consolidation, specifically early on in a bullish ascending triangle that will probably see a head fake move below support-that's where I'd be looking to add. We do have the EIA Nat Gas report tomorrow morning and we should see some chop/volatility in the triangle, but I would still wait for the trade to line up just right.

The charts...

 UNG daily MoneyStream Chart with a huge leading positive divergence, however we were on to UNG long before MoneyStream gave a signal, in fact we were already long UNG.

It was really a 5 day chart of UNG price/volume that showed a change in character and those precede changes in trend, after that we started paying more attention, this 4 hour chart shows a leading positive divergence much earlier than MS and a current leading positive that looks like UNG will soon enter Stage 2 mark-up which is what we have been waiting for as the next major event in UNG. I said this would be a long term long position and it has been a profitable one even at that, without stage 2 having kicked in yet.

 Here's the base, a large ascending triangle with a head-fake move in late July, when you see triangles this big they are either bases or tops depending on the preceding trend, THEY ARE NOT CONSOLIDATION PATTERNS. If you look to the far right you'll see a smaller ascending triangle, this is a consolidation pattern.

 Here's the bullish consolidation price pattern where it should be, following a move up; it looks to be a little more than 50% complete. I would suspect a downside head fake move and that's where I'd want to try to enter UNG, that should be followed by an upside breakout.

 Here's a closer look on a 30 min chart, we are at the lower support range, perhaps we get a head fake move here, but it seems a bit early, however the sooner these patterns breakout to the upside, the more powerful they are, especially with a failed break to the downside preceding the breakout.

The daily Bollinger Bands also show they are starting to pinch as this price formation matures.

There are plenty of positive charts in UNG, but short term this 2 min chart seems to indicate a head fake break down move is the highest probability, I'd want to add when I see that and this chart shape up and go positive, so PATIENCE.

EIA Petroleum Report / USO

The EIA Oil report came out at 10:30, although I don't have consensus for it, it did come in at a build and USO didn't seem to like that at least initially.

Released On 10/24/2012 10:30:00 AM For wk10/19, 2012

Prior Actual Crude oil inventories (weekly change) 2.9 M barrels 5.9 M barrels Gasoline (weekly change) 1.7 M barrels 1.4 M barrels Distillates (weekly change) -2.2 M barrels -0.6 M barrels

When deciding what kind of Energy exposure to have in the mix as I added longs, I chose Energy more broadly with ERX rather than oil more narrowly as the signals continued to show Energy as a sector should outperform oil, take a look at the responses this morning after the EIA between oil and Energy.

 Oil/USO dropped

Energy gained.

 Longer term the 1 min trend has been putting in a positive divergence so a bounce in USO wouldn't surprise me.

 Here's the 1 min intraday, negative at the EIA report and slightly positive as USO moved lower.

 2 min also positive intraday, so far anyway as it is early.

 The overall 10 min chart is leading positive and I'm starting to think USO will do some backing and filling in to the gaps above.


Since USO broke down from this price pattern, it has made sense, but the recent gap down yesterday on increasing volume is starting to look more like short term capitulation, which again would put the gap in sight for a bounce. With the F_O_M_C today, anything could happen, but based on what we can see now, the probabilities of a bounce are increasing by the day now since yesterday

Market Update

I'm already hearing from our members who were/are long FB which is a trade we first recognized back in August as most probably going to put in a larger base for a larger move, I still think over the weeks and months to come we will see more upside in FB, but I want to verify that with the charts.

So far one of the best gains I've heard is a member with December calls selling them this morning at a +300% profit.

As for the market, today is an F_O_M_C policy announcement day, it has been 12:15 pm EDT the last few times with a press conference at 2:15, I'm showing the policy statement at 2:15 today according to Bloomberg, I don't see anything about a press conference, however the F_E_D according to the minutes from the last meeting was fooling around with ideas to "better communicate" F_E_D policy which would be market or macro-economic based rather than timetable based as it has been. It would seem to me that approach would only cause more uncertainty, nothing is as certain as the F_E_D saying, "ZIRP will stay in place until 2015", economic data changing that forecast as it comes out could move a date like that all over the map, this is why I suspect we have seen a flight from big name high fliers like AAPL and a move toward the cheaper, beaten up stocks that have already taken their lumps.

In any case, it's pretty normal for the market to be range bound or in a holding pattern in front of the policy statement.

AS ALWAYS, I remind you to beware the F_E_D "knee jerk" reaction that we almost always see, it's almost always wrong. Here's the last one...

The knee jerk here was a quick move up on heavy volume, it looked very impressive, then things took a different course. Just be aware not to panic on the initial reaction, it takes some time for the market to settle in around F_E_D policy/statements.

Finally the market update, yesterday we had many different indications of a risk on market today from leading indicators, daily closing candles, FX, volatility indices,  market divergences, and more. It's strange to see that on a F_O_M_C day, but we have seen leaked policy before-in fact about 2 hours before it was due out and we moved in the opposite direction of the market before the policy statement, following 3C rather than price and were rewarded for it. I'll keep an eye out.

Opening indications look like a halt/holding pattern, but these early hours are the most deceptive price action of the day...

DIA

 2 min was negative in the open, not by much, but enough.

 The faster 1 min is showing improvement starting to kick in.

 Of course the longer term 10 min+ charts have put together a nice divergence this week so far.

QQQ

 This is one that had a bullish reversal candle yesterday on volume, a star reversal.

 The range in the QQQ is now much clearer than it was the first day which is what I was trying to explain and prepare you for, this is what we want to see.

 1 min opening was negative

 2 min chart is already showing improvement, by the time I post this we may see that kick in.

 We have a leading positive divergence all the way out to a 30 min chart here so overall it has been a good week for the action we were looking for as of late Friday.

SPY

 Here's another bullish daily closing candle yesterday with a Hammer on volume.

 The SPY range is looser, but it's there.

 The open 1 min chart was negative

 So was the 3 min, but overall there's a leading positive in the near term so I suspect that will kick in soon as well to some extent considering it's a F_E_D day.

ES 1 min

 Here at the green arrows are the European and US opening, there was a 1 min negative divergence on the US open and a positive on the European opening.

NASDAQ Futures

These are in a leading positive divergence.

Quick FB Update

It's too early to see what's going on with underlying trade in FB and quite frankly there's just too much chaos to come out of it with any conclusions as the volume already this morning is nearly yesterday's entire day.

However from our FB expectations, we can still work out a little of what we expect to come.

We know there's another lock-up period ending (something unique to IPO's) and I suspected we'd see much higher prices before that lock-up period ended as MS and GS would like to retain some of their IPO business in the future and the way FB is managed for the insiders as lock up comes and goes will determine how much IPO future business they get.

Everything else is on the charts.

 Today's daily chart shows FB right at a Stage 2 breakout, meaning this should lead us to stage 2 mark-up now that we have left the stage 1 base. It may take several days or even weeks of consolidating these gains before we see a real trend, but I suspect we will see such a trend at least in to the end of the lock-up period. While I think taking some 1 day double digit gains in a stock as large as FB makes sense as you can probably add the shares back at a lower price in the days ahead, I also recognize that this is THE BASE we have been so patient with and have believed in, now that stage 2 is at the door step, I would want to let this winner run. So any shares sold in to this pop, I would try to replace at lower prices which shouldn't be too hard.

Remember the FB divergence, this is what kept us in the trade, this is what told us this was a base and today it has proven it with a breakout of that base. I look forward to seeing what 3C looks like as trade settles in.

FB Gap Up

With FB looking to gap up about +27%, you might want to consider taking some profits, and let some run

FB Gap Up

With FB looking to gap up about +27%, you might want to consider taking some profits, and let some run