Still monitoring MCP Too

Today MCP is down -3.63%, although it is above yesterday's lows by a bit, so technically nothing has happened in MCP today. I'm just keeping an eye on it to see if anything unexpected or "gamey" pops up.

 Today is pretty flat compared to the last 2 days, technically today is an insignificant day or so it would seem.

Interestingly for all the downside in price, why this 10 min chart is improving is one of the reasons I continue to watch MCP.

Finally for any of you who know the basics of candlestick charting...

The last 3 days show real fear 3 days ago and possibly a lot of short sellers taking profits. Yesterday actually forms some support as new lows were tested and rejected with the close not too far from the open, a sort of equilibrium and maybe support. Today is a Doji, this is a loss of momentum, kind of indecision on its own, but in a trend like this it's more like a loss of the downside momentum.

The SEC investigation is a bummer and I'm not saying that MCP still has good probabilities, but there are a lot of games on Wall Street and MCP hasn't given a total loss signal, in fact it stubbornly is clinging to several divergences that could have easily been wiped out in an hour or two 3 days ago.

BIDU Update

I don't see anything interesting that would send BIDU down today, there are a few articles here and there as media tries to provide an answer to the search for "The Reason".

In any case, I'm still watching BIDU with interest here because I'd love to pick it up if I can see near term probabilities increasing to the point they are worth the risk. For some of you who may not have any exposure to BIDU, I'd love to provide a really good opportunity that is very low risk and high probability.


Here's what we have so far...

 BIDU 1 min chart yesterday and today, there's some positive action on the chart, this wouldn't be enough for me to take an added risk, but it's a start to work from.

 BIDU was a shorter term trading idea, because it's been a smaller base-the 2 min chart though has shown recent positive momentum like many other Tech or tech related sectors/assets. Also support here is broken on the move today and it did hit stops.

 Here's the longer term chart-15 min discussed yesterday in a leading positive position.

 Here's a moving average on a 15 min chart, areas where BIDU has been knocked down, etc. I'd like to take a look at a VWAP on this one.

And here's the support level, that's a lot of stops hit in 5 min (almost 400k), they were obviously known before hand, this is why I never want orders on the books, it's like showing someone your hand in a game of poker, when the masses do it, it becomes an easy meal ticket.

Market Update

On the 1 min intraday charts the SPY, QQQ and IWM have intraday, smallish negative divergences, for the most part nothing in the 2 min timeframe is disturbed, in certain instances like the Q's, the 2 min chart is just flying.

QQQ 2 min

This is one way we judge whether a divergence is just the normal intraday movement as there are very few instances when a market just moves in a line or if there's something developing we need to pay attention to. I see this as a normal intraday move.

As for where we are...

On an intraday basis or say this morning in pre-market, it often seems like the market is moving much more than it really is, that's the emotional component used to swing traders out of positions and in to losses, but if you look at a moving average of the SPY on a 10 min chart, you can see the trend rounding up, I think at some point soon it will be more vertical on the right side/upside, but as the process unfolds there are these dips and bumps that make things seem a lot different than they really are.

For instance, it feels like we've been in a nasty, nasty market the last few weeks, listen to the media and you'll know what I mean. However, since the QE3 top, in two months the SPY has only lost about -5.68% and that in 2 months, the media makes you feel like we lost that in a week, in fact we have lost about 3 times that in a very short timespan in 2011, this market isn't falling apart like the media or intraday trade, even day to day trade sometimes makes you feel. I believe it will, but I also believe there's a reason it hasn't done so yet and that reason was expressed some time ago.

I think at this point, it's important to keep your eye on the charts and timeframes like I just posted, something is brewing and I think it will probably be more extreme than we even expect.

I've been approaching long positions from a more speculative basis as far as risk management goes, but I do believe some decent money can be made on them, I would just try to not let emotions sway you as you might have felt when you saw the futures this morning before the market open.

Yes, we are guessing as to what is most likely to happen, to say you know for sure is to be dishonest, but we are making those guesses based on real information, real proof and on information most people don't see and if they did, wouldn't understand.

There's just too much going on to think nothing is going on

The market moves at its own pace, which is sometimes frustratingly slow and seemingly very much at odds with what you expect, but I've learned over many years when you have a market making good on the concepts you expect to see (even if not exactly how you envision them or exactly when) and you see signals like these, I don't ignore them. Every time I've found a reason to write them off or explain them away, I've regretted it.

The problem is knowing for sure, we all want to know for sure and you can do that with the market, you just can't make any money doing that; by the time you know for sure, the opportunity has passed, that's why we look for evidence of the strongest probabilities and decide whether to go long, short or step away.

Here are just a few charts I collected this morning as I've been making my rounds and nearly every one is either very similar, has done what we expected, has the longer term more important and large positive divergences and/or has shown recent strong positive 3C momentum, I can't ignore these.

Look at the open! Look at the futures positive divergence this morning. The SPY gapped down to a new opening low and is now trading ABOVE the last 3 days' close!

 DIA 15 min leading above where the last peak high turned down, it has done everything forecasted.

 IWM 10 min leading positive again above the last peak high in mid-October with strong recent momentum where we'd expect to see it.

 QQQ 15 min also leading positive, has done all that we forecasted and has strong recent momentum on a longer term chart.

 QQQ 2 min, talk about strong recent momentum, look at that leading positive from yesterday and today.

 SPY 10 min leading positive, but also putting in that nice rounding area with lots of volatility to keep traders guessing.

 Treasuries as the Flight to Safety Trade, leading negative at a new high and these aren't the only charts for each of these assets, I just didn't want to overwhelm you with charts.

 Energy 15 min leading positive with a lot of recent momentum where we expect to see it.

 Financials 15 min leading positive.

Tech with tons of recent momentum.

I can't ignore these, the things/concepts we look for have or are finishing happening and the signals we thought we'd see are there.

Opening Indications

All of the opening indications are strong, the averages opened on the gap down in to positive divergences, several made some large gains yesterday, for instance the Q's for one....

 1 min opening in to a positive divergence on the gap down.

 2 min hit a large leading positive new high yesterday

3 min did as well, so did the 10 and 30 min. Like I said about BIDU, I don't trust that move down, I don't trust this gap down, it feels like something is underway.

I'll be watching BIDU carefully and considering adding there. I usually don't trust early trade and that's probably why I'm a bit hesitant and wanting to see more, but there are some very bullish indications in front of us right now.

BIDU Update

I'm not quite sure what's going on in BIDU, but I don't trust it.

I'm quite tempted to add to yesterday's call position here, the only thing I can see or imagine right now in BIDU is a shakeout move.

 1 min chart from yesterday has a negative, but only 1 min. which would be along the lines of consolidation or pullback...


 2 min is not there, in fact this is a large leading positive

 5 min positive

15 min positive...

As I said, I'm quite tempted to add here, if this were a totally new position I'd be all over it as I see the risk:reward ratio very favorable here.

I'm going to look around a bit more before deciding, but my first instinct is not to trust this move down this a.m. and the charts would agree except the 1 min, but even that is showing some positive action now on a relative divergence.

Quick Market Update

So as the Futures positive divergence suggested, we've seen a pretty strong move up off the open, but in taking a closer look at both S&P and NASDAQ E-mini Futures, I really don't see an area in which they were really that negative to start with; the positive divergence is more than clear, the negative divergence, not so much.

 ES positive divergence starting since before the European open, but very strong by the US open and price followed it right up as soon as the bell rang.

 NASDAQ futures in the early overnight session to the European open, there's no real negative divergence there, so this was all a reaction to news with no real underlying institutional activity? You can see the NASDAQ futures were also going positive in to the European open, but...

The divergence was quite strong by the US open and price followed. Interesting. Time to look around.

RIMM Update

Yesterday I showed you this idea for RIMM and said it looked like it would fill the recent gap, today it has pretty much done just that.

 Here's the gap being filled this morning...

 This was the 1 min neg. divergence that made me think the gap would be filled...

And here's the daily Trend Channel with a potential stop in the red area.

So far the 3C positive divergence on the S&P futures was right, the gap has quickly been filled or just abouts, I want to keep an eye on the market and RIMM and make sure these charts stabilize as they should before making a big jump, but I do like RIMM quite a bit as you saw yesterday and Samsung hiking the price of AAPL's components by 20% yesterday shouldn't hurt RIMM's business.

The Feud

Apparently what sent futures lower overnight was the reminder that the EU is fundamentally broken, can't find ideas or the money to finance those ideas and more than anything, comes off as one hand not knowing what the other is doing, this has haunted all of their grand ideas.

At the conclusion of the Finance Minister's meeting during a press conference, the EU Finance Ministry head, Jean-Claude Juncker said that Greece would have their 120% debt to GDP target extended to 2022 and somehow the bond payment due on Thursday will be financed so Greece won't default.

The disagreement came when the IMF's Christine LaGarde said they are not moving the timetable for 120% debt to GDP, it will remain at 2020, then Juncker said he was not joking, it would be moved, to which LaGarde rolled her eyes and shook her head and said, "We clearly have different views".

It turns out the market didn't like that reminder of what happens when the EU tries to fix itself, the interesting news is that somehow, even though the next Troika tranche of aid was not approved, Greece will meet its $5bn bond payment due Thursday. That should be interesting, but Juncker said it's so. I believe Juncker also said something like, When things are really serious, sometimes you have to lie".

The Fin-Min Feud

As the FT calls it, the EU Finance Minister's meeting ended in a feud, sending the EUR/USD and futures lower.

 Yesterday's 4 p.m. close

ES overnight with the European open

ES moving in to the NY open, there's a decent size positive divergence in S&P futures, I'd expect a gap fill and then...

More on the Feud in a min.