URTY / NFLX Long

As a Spec / quick trade is starting to look interesting. NFLX is looking more interesting,, but where one goes the other should follow.

VXX and TLT Are Really Telegraphing

Look how weak the reaction from TLT and VXX is on this move, it wasn't 10 mins ago I said "Watch for an extreme move that will pull in the shorts and boost volume".

With that kind of move, TLT and VXX should be flying, they aren't.

This looks like the head fake, I'm not entering anything though unless I see a great set up, great confirmation, just sticking with what I have.

And There it is

The SPY making the new low, the increase in volume I was thinking would be there as shorts jump in, this is going pretty darn good so far.

I'm going to look and see if anything looks really attractive, but this is probably pretty close to a reversal area.

This is Great

First off, the SPY is showing some positive divergences, but I think they (the Cyborgs) want that lower low I mentioned because shortly after the SPY went slightly positive, HYG went slightly negative and TLT went slightly positive, it seems both were all of the sudden being used to try to pull the SPY back down and make that final lower low I mentioned.

ES is also positive, I didn't check the other two.

 SPY starting to go positive and bouncing a bit...

HYG is still relative positive, but there was some extra pressure put on it to reign in the SPY I believe as the timing is right.

 The opposite was done with TLT as it accomplishes the same goal, reign in the SPY.

This part is the best, you know the scenario I described yesterday? Here's today's recap.

This chart was sent to me by a member who snatched it off Stocktwits, this is exactly how I described retail's reaction YESTERDAY, this chart if from today.

Yep- Getting Close- May be There

Not only are HYG, TLT and VXX (to a lesser degree, but still there) all moving in the right direction to reverse the market, the Bellwethers I looked at like GOOG, APPL, NFLX, etc are also building positive, amazing isn't it how smart money just work like the "Borg" or the "Collective" for you Star Trek fans, or like ants coordinating something, like a bridge? You ever see those leaf cutter ants in the AMazon actually make a bridge for their co-workers to traverse a span? Yep, there's that communication, the market code and it's showing up in other assets so I doubt we have much longer.

Remember the concepts are the concepts, they work in all timeframes because humans and their emotions are trading in all timeframes so that being said, some sort of last minute big head fake before a reversal is likely-I'd be on the look out for anything that would really entice the bears.

Here's what I have

 The SPY only put in 1-2 min negative divergences at resistance, smart money was going to make sure that happened as I said yesterday to give retail what they were expecting, other than that, I don't see any signs here and I'm not sure I'd expect to. I didn't see smart money dropping any of their positions Friday or yesterday, just like me, I wouldn't think they'd want any more than they already have unless it was really tempting as there's likely to be a pretty quick turn around time once above the triangle.

I don't think we'll see a reversal process and therefore no real 3C signals on the SPY, but where you would see them and a more effective way of squeezing the shorts is for a "V" reversal, not to give them time to think about it, would be in the Arbitrage levers.

In HYG it's already starting to go positive and didn't lose much ground-that is positive for the SPY.

TLT saw a pretty nasty divergence really quick, not huge, but I doubt it needs to be, I think fast is the key to an effective short squeeze.

VXX is moving along with the market, but any downside movement is positive for the market,

The longer term TICK for today is probably a good indication to watch for that channel to be broken to the upside.

I'd think we'd get at least one more lower low, hopefully really pick up some volume, it's right there to be had.

The USD/JPY isn't giving away anything, but the $USD itself looks positive

And the JPY is in line, that's close enough to a positive leaning in the pair, so that's a market positive as well.

I suspect we are probably getting close.

Market Update

Things are moving as expected, the initial resistance at the bottom of the triangle, lower lows/ lower higher intraday, nice, clean price patterns traders can easily identify like bear flags, etc. The DIA may be showing the start of something changing, but we still have plenty of time.

To me it looks like the Q's have a ;little bearish price pattern of their own that will need to break too to make it an effective move in the market, what is the point of the Q's don't break under what looks like a  small topping pattern, in fact I just looked and they are breaking below now.

 There's the rejection at resistance and action since on a SPY 30 min chart...

Here's a closer look on a 5 min chart, note the bear flag, note volume picking up right where it should, these are all patterns retail falls for, they aren't patterns smart money falls for, they use them as a means to an end.

While I don't see much in the averages, TLT has a negative and HYG has a positive, both are market positive so we may be getting close to starting something. Whether or not I take on additional call positions will really depend on how strong the set ups are, I'm not fond of taking on much more.

I'll keep you updated on the arbitrage levers (VXX, HYG, TLT)

Crude / USO / SCO

Crude / USO shot up very strangely on apparently no news whatsoever, no currency catalyst, it just looks like an old school stop run so I intend to wait for the signals to appear of a high probability negative divergence which I would expect being this doesn't seem to have any roots beyond a stop run, then I'll look at either adding to SCO or maybe entering a USO put position.

 This is the move this morning, it's actually more parabolic than it looks here which will do the job and scare oil shorts and make them take a decision quickly which is almost always going to be based on emotion as the market is moving too fast to gather data and see if there's something real like the US and Russian Navy have some sort of escalation over Syria.

 Here's a better look at the emotional side of a stop run.

I just don't see much of anything behind this so for now unless I get different data, I'm assuming its a stop run and will wait for it to turn.

That's a Bear Flag

As predicted, some sort of flag or triangle, that's a bear flag, it keeps shorts in the game, a break below the flag should see volume pick up a bit, a new lower low on the day should as well. Each trader has their own limits of risk, some will short early as soon as they see resistance at the triangle, but not many, most want some price confirmation, we saw the first break of support for today drew some shorts out. A break below the flag will draw some more out and the most nervous of them will wait for a new intraday low on this move down from resistance.

This is exactly what retail Tech. traders expect to see, what Technical Analysis has taught them to look for, it's just those who are trading against them and us, have better tools, more information and know even better than I do how predictable these traders are. Don't forget where and why the majority of traders went from managed brokerage accounts to managing their own and why Technical Analysis went from something people use to openly mock like, "Oh, so you can tell what price is going to do by watching those squiggly lines? LOL-OK! Good luck with that!"

The reason there was such a major shift in sentiment about TA and so many people picked it up is because it's a lot easier and less time consuming to call something a buy or a sell based on what a couple of moving averages do (which is one of the most popular forms of analysis to this day-moving average). What I'm saying is the majority of retail technical traders are just plain lazy, that's why they keep doing the same thing over and over no matter how many times they get burnt.


And as I'm typing, the bear flag is just breaking now. Keep an eye on the volume.

SPY 1 min

MCP Interesting Here

The range in MCP suggested the probability of a head fake move, again this is playing on the predictability of technical traders, they see support in the range and place stops right under that support, that's why it makes it so easy to hit them and accumulate the shares and for some reason, no one ever asks, "Who took the other side of that trade?" (buying the stopped out shares), typically that would be Wall St. on a head fake move which this looks to be.

For now I'll refrain from adding unless I see something I just can't pass up, but I will continue to hold MCP calls already open.