Market Update

Here's the latest...

Starting with futures...

These are the 5 min 3C charts of the S&P and NASDAQ futures, they don't have the positive divergence on them that has been working so well with our weekly call/put positions, although volatility is higher now so we could see a move that exceeds our expectations and if we do get a solid move, I expect it will, it needs to keep traders emotionally off balance and extremes do that.


However the strong accumulation on the 5 min chart is not there, this is one reason I opt for less leverage, the other is any long trade is already hedged with core shorts so I'd prefer to use less leverage here given the charts.

 ES 5 min slight leading positive divergence

 NASDAQ futures have none.

 As for the market, as I said last night, a reversal which I thought to be likely in the short term is a process, not an event so the white arrows depicting a "V" shape reversal is not what would be expected, but rather a "U" or even a "W" shape if price pulls back toward the lows of the day.

The size of the base as well as the strength of the divergences tell you a lot about it's ability to maintain, volatility is up and options are going to be more expensive to start with, but the point is we can still have a large move just based on volatility and market behavior in these areas.

 2 min DIA negative on yesterday's highs, in line on the move down and positive today with a short term intraday negative divergence, this is why I'm patient about a possible pullback.

 IWM 3 min with all the same features except the intraday pullback, I may look in to URTY long as a 3x leveraged ETF for a quick long trade, that's the IWM 3x Bull.

 IWM 5 min looks pretty darn strong, this is why I'm leaning toward URTY long and maybe TQQQ-long the Q's 3x leverage.


 The IWM 2 min has a small intraday negative divergence so I'm hoping to get a pullback to lower risk.

 QQQ 2 min with a leading positive today and a relative negative recently, this is the probable pullback signal intraday.

 QQQ 5 min leading positive after a weaker relative positive, you recall how today's sentiment was cautious earlier.

 SPY 3 min

 SPY 5 min looks pretty good here too, the long 3x leveraged is UPRO, remember though these are speculative, short term trades.

This is the reason why, the 30 min SPY, the back of the uptrend is broken, the real trade here i selling short in to price strength, that's where the real probabilities are so you can catch a little upside I think, but that's our real objective.

Plan

I'm going to wait a little bit and see if the market pulls back just a bit, the QQQ chart and ES 1 min intraday looks like it will...

 Intraday relative negative divergence among a large leading positive, but still short term.

 NQ futures with a small intraday negative

ES with a small intraday negative

The 5 min charts aren't where I'd want them to be to take on the weekly options trade, volatility is increasing so on a pullback, or you could even start phasing in here as long as it's part of your risk management plan, I'll be looking at a 3x leveraged position like TQQQ or UPRO, this is for a short term trade only. I'll let you know what moves I make, but these will be speculative size (50% of a normal position).

GLD Calls Fill

The fill was $7.69 so this position opened Friday of last week just made 62%

Like I said, I have the feeling we'll be able to open a new position on a pullback.

Closing Out the Rest of GLD April $150 Calls

I think they can be added back at a lower price.

Here we go

The charts are looking good, I think you can probably get away with some weekly calls, it's not my thing here and I'd go out to next week, but if you get some Q's or SPY, I think you can probably sell them tomorrow. I'd keep it speculative.

Leading Indicators Update

This is all intraday only as we are looking for a bounce that we can use as a tactical entry area.

To save time I'm not going to post the charts, but just make this a written update.

Both High Yield Corp. and Junk Credit are performing better than the SPX, this is a risk on posture in the short term.

The $USD and Euro seem to have very little to do with this, if anything the Japanese Yen intraday has the closest correlation to the market, I'm not convinced its the Yen moving sentiment, but it is in the proper correlation. The Aussie is in line, but it's not leading the market.

Yields aren't leading the market either, they are in line to slightly underperforming the correlation.

Basically the only thing standing out is a risk on posture in Credit and the instruments of choice are the most discounted, HY Corp and Junk.

CONTEXT is even out of line with ES rich vs the CONTEXT model...

So what is driving the market at this moment or at least seemingly changing sentiment toward that oversold bounce we talked about last night?

It seems to be Wall Street driving underlying trade as we saw in futures and the averages. From my point of view, that is the best because it means there's no underlying strength behind the sentiment, it's just market manipulation as they seem to be looking to do the same thing we are looking to do.

There still needs to be a process to a reversal in my view, not a "V" shaped move. Also volatility is high and they'll likely keep it high so any move to the upside is likely to be impressive, although hollow, this "may" make it worthwhile to play a very short term move on the upside with one of the averages, I have certain standards that have to be met and they aren't yet so I'd rather miss the move up than take a sub-par trade, that doesn't mean those standards won't be met, they may very well be met before the close.

I'd probably expect some more market chop laterally which may mean a move toward the lows of the day, but as long as 3C keeps moving higher, we are in good shape and thus far it is.

What we are looking at right now is pure short term manipulation, but that' fine with me, whatever it takes to get the job done.

Market Update

I'm not counting any eggs here, but this is movement which we have been sorely lacking this morning, I would not trade this, at least not at this point, but I'm more interested in selling strength. We'll deal with that when or if we have a solid enough edge.

Futures...

 This is a pretty strong leading positive ES divergence -SPX futures.

 The NASDAQ which has been floundering may be playing possum here, it too has a leading positive divergence in the futures.

 DIA 2 min is looking better

 5 min IWM is looking a little better

 2 min QQQ is starting to look very interesting.


 5 min SPY is leading positive, still small, but moving.

Here's GLD, we got out right at the top this morning so I feel good about that.

I'm going to check some leading indicators. I know patience is the hardest part sometimes, but it is your greatest advantage over Wall St., you don't have to be in the market all the time, you can pick and chose your battles on your terms. USE THAT ADVANTAGE.

Quick Update

I'm seeing some strong 1 min upside momentum in ES and NQ, I haven't even checked the averages yet because this is so important, but I'm sure it will be there, this is what I'd like to see, this is how we'll open opportunities.

Market update

If I'm slow on answering your emails today, please bear with me, I'm trying to listen to the Senate hearing, see where the market reacts, keep track of positions, look for opportunities, watch out for traps, etc, I feel like a one-legged man in a butt-kicking contest.

Last night I said (and I say this often),"A reversal is not an event, it's a process", actually last night I said I don't subscribe to "V" shaped reversals, they are usually more "U" or "W" shaped, in that regard, the market is right where it should be, but it is VERY much on the fence here, one slip from Bernie and down we go, otherwise Wall St. needs the market to bounce just as we do to open new opportunities.

Right now is not a time to be opening positions, it's a time to wait this out for a strong signal. We are getting signals, but not strong, they are VERY cautiously dipping their toes in the water and I mean tippy-tippy toes.

Here's a look at the averages and TICK.

 DIA 2 min intraday is slightly positive here.

 The IWM is positive, but very slightly out to the 5 min chart. If you look at the yellow arrows to the left, this is what a typical reversal looks like, it takes about a day, it's not a "V" reversal.

 The Q's have a 2 min positive, this really is telling us there's almost no edge either way, everyone is waiting, when 3C starts moving we'll know and this could happen in the course of me writing a post like this.


SPY 2 min slightly positive as well.

The TICK puts all of these charts in to perspective.

We have no clear trend except lateral with huge swings between -1000 and almost +1000 so it's nearly a dead heat here.

There's no edge at this moment.

GLD P/L & Fill

The longer term charts are what attracted me to GLD, that's also why I wanted to shift from March out to April, however in the very near term this run this morning in GLD looks pretty darn nice, but when the intraday chart (3C) failed to make a new high with GLD, I started considering closing some of that position. Since it is an April expiration, I don't mind leaving some on the table at all with the great looking longer 3C chart which are way more important, but tactically it is worth a shot to try to take some profits here and re-enter at a lower cost basis.

 The fill as you can see below was $7.72 so the gain on this position opened Friday is nearly +67%, you can't sneeze at that.

If I see a good re-entry point, I will of course bring it up as a new or add-to position.