SPY Arbitrage

The improving nature of the SPY Arbitrage suggests that certain levers of intraday market manipulation are being pulled, much as if they wanted to understate early trade and will come in with a bang, "Surprise" in the afternoon session such as I mentioned in the last Market Update.

I have't found anything in the intraday charts that would be inconsistent with the trend now in the Capital Context SPY Arbitrage chart.

Quick Update

Although I wouldn't say signals are screaming right now, I would say probabilities still look to be on the side of a move higher.

NASDAQ futures have a short term (day/s) positive divergence, I'm not getting much help from ES or TF, but the $USD still looks like it will see a move lower that could start as soon as today, the Euro and Yen aren't helpful, but the $AUD which has been an excellent leading currency lately also looks as if it will make a move higher.

In addition, AAPL looks like it's coiling up for a move higher which the market desperately needs (at least broad support from the Tech sector).

All in all I will stay patient with the short term long positions that are open, but I'm going to show you the Leading Indicators post next and more importantly than the short term signals, the bigger picture (I hate to say long term because it makes it sound as if it is still way off in the future which it is not) show really what the best use of any price strength really is, it's the same as what we expected and were looking for before this move got started, sell and short in to strength and I usually don't like longer posts like that in the middle of the day, but this is important.

You might keep an eye on the intraday NYSE TICK data for any hints of an impending intraday move; right now it's still pretty neutral.

GOOG Update

Yesterday's late day GOOG calls meant for a very short term move up (5/10 $800) are at about a 10% profit this morning, I'd like to get a bit more out of them and it's still very early in the day, I'm going to have to take a much closer look at Leading Indicators and other indications before I decide whether to take the profit and decide whether or not this is the area I want to continue filling out the GOOG short equity position (or start new ones) .

For now, here's what we have, mostly short term charts as this was intended to be a short term trade ( a day or so), the thing about short term charts is they can change pretty quickly and an afternoon move is sure to come, it's figuring out from here which way that is most likely going to be.

 5 min chart has lost some of its momentum...

The 2 min intraday chart doesn't look good, but this is a timeframe (intraday) that can swing around fast, I'm not expecting GOOG to get healthy, I'm just trying to figure out whether it can sputter a bit higher before giving up the ghost.

The weakness of the 2 min chart hasn't migrated to the 3 min chart yet so it's somewhat contained, it's more up to the 3 min chart right now as to which way the 5 min goes, does the 3 min have enough strength to push the 5 min higher or no?

The longer term 60 min shows clearly why I wanted to short GOOG in to price strength, first we'll need to answer the call question and then we'll likely be close to our second answer.

I'm checking Leading indicators, futures and currencies now.

SLV

I've been watching SLV and this is my VERY LEAST FAVORITE asset to trade, but I do like what I see. Here's yesterday's update...

As for today, here's what has changed and why I decided to take action now.

 This is the flat range on a 15 min chart that we often see accumulation or distribution at, likely because of orders being filled at a certain price or VWAP.

The 10 min SLV chart went from strong distribution to our short term leveraged long silver trade bought on the 4th and sold on the 9th and recently the positive divergence has looked excellent.

 The 15 min chart shows the same, yellow arrows/boxes represent head fake /false moves that we see so often before a reversal.

SLV gapped up today and filled the gap, it was on the downstroke that I wanted to open a call position as the gap was filled.

There's still a fair chance for a head fake move below the range before SLV moves higher, but I'd just add at that point, I'm not concerned about the overall position.

If you are looking in to an equity position like SLV or AGQ long, you might want to follow some intraday momentum indicators and look for positive divergences in to pullbacks.

Opening SLV May 10th (weekly) $22 Calls

AGQ the 2x leveraged ETF (long) should work well too for those that prefer equities, on these smaller, faster moves I prefer some leverage.

Charts/follow up coming.

GLD May 13 $130 Call P/L

With two open call positions in GLD, it was definitely overweight, I think there's still more upside in GLD, but decided to capitalize off early momentum for a nearly +30% gain for a position that is less than 5 days old.

Closing Half of GLD May 13 $130 Calls

NQ / NDX /QQQ

This morning's pre-market futures  without a doubt showed the strongest positive divergence pre-market in NQ (NASDAQ 100 Futures)/ QQQ.

Look at this morning's early performance, compared to the SPY and IWM, the Q's which unlike the other two, gapped down, quickly made up ground with much stronger relative performance, it was all there before the market opened in the futures.

Early AAPL Update

It would "seem" as if retail smartened up in after hours, but that's hard to imagine, in any case, the late AH weakness in AAPL caused a gap down, not surprisingly because of the longer term strength in AAPL charts, this is how AAPL opened...

 Since 3C isn't in scale as price is the scale on the chart, you can't see the leading positive divergence the last hour of regular hours trade yesterday before earnings. However you can see the strong relative positive divergence right on the open this morning.

In fact, the positive opening divergence spread its wings all the way out to the 3 min chart this early, that's pretty impressive.

Pre-Market Futures

We have what appears will be a mixed open with the SPX, Dow and NDX all opening near yesterday's close, while the R2K looks set to gap down a bit.

Here are this morning's futures...

 ES/SPX Futures- after surging to new highs for the week overnight, weakness came in just after the European open on some bad German Business Confidence report, ES is in line right now.

NQ/NASDAQ futures also surged to a new high on the week overnight and saw a negative divergence at the same time as ES above, just after the European open, however there is a fairly substantial positive divergence going in to the US open.

TF/Russell 2000 Futures also surged to a new high for the week overnight and declined at the same time, 4 a.m. EDT, R2K futures are currently in line with the 3c/Price trend.

The $USD looks set to weaken pretty significantly at some point today, the intraday chart isn't quite there, but the 5 min shows substantial weakness building in, this is a market positive. The Euro as of now has no major divergences and looks pretty flat, I imagine the EUR/USD would rise just on $USD weakness, again market positive. After seeing some initial overnight weakness, perhaps on news of the bird flu spreading from China to Taiwan, it recovered well and has a leading positive divergence, generally market positive, depending on the Yen. The Yen still looks very confused, I wouldn't be surprised to see early weakness (market positive).

As for the pairs, the EUR/USD (as suspected) looks like it will see some upside, the EUR/JPY, USD/JPY and AUD/JPY have no significant signals right now, overall, somewhat market supportive.