BIDU Gap Fill Not an Opportunity...

I was looking for a possible hitch-hiking trade (long) maybe some BIDU calls on Thursday's update, but the signals just weren't there to take the risk, I figured today's pullback in to the gap would have some improvement for a short term trade, but all I've found thus far is a good reason to keep the core short position open.

 Friday's post pin positive divegrnce for a gap up today or a pump and a gap fill today so far, but no positive, not even on a 1 min charrt, it is simply in line.

I cannot open a long of any sort without a positive divgerence on at least a 5 min chart, but nothing on even a 1 min, this just makes me glad I kept the core short position open.


The 3 min chart is worse...

As is the 5 min chart.. in many ways this is a proxy for the broader market.

Market Update...

So far , still so good.

Like Friday there's a negative divegrence that has caused a loss of momentum from the initial overnight pump and then the additional pre-market pump, it seems to be a trend that's working, pump the market in the low volume overnight  session and then sell in to it during the higher regular volume hours so they aren't leaving footprints or causing waves to the causal observer.

First the averages...

 SPy's Friday afternoon accumulation, as usual, 3C action picks up where it left off and the late day accumulation suggested an early pump or price strength in the market Monday, however like Friday we see intraday negatives setting in.

Here's the post again from Friday explaining what we were seeing and why I thought we'd see more of this P&D action as we move in to the new quarter with window dressing pretty much complete considering the T+3 settlement rule (Trade and 3 days).

The Q's with the same Friday afternoon positive and the same loss of momentum

And the IWM

 The Index Futures...

 ES showing the same except this shows the pump pre-market in addition to the gap up on the open of futures trade last night, we also see the same intraday negatives or distribution.

 TF futures, the same

NQ futures the same


The ONLY reason ANY market upside has been of interest to me is the VIX futures or short term futures (VXX) and the strong, near vertical leading positive "Flying" divergences that only VIX assets put in, I suspect they give these much stronger signals because as they say, the VIX is considered "The Fear Index" and when there's fear, they are accumulating VIX hard, this has been the key to many market pivots/reversals, and I have been waiting on what is going on the 4th week I believe as the market has been in a stage 3 top.

 Note the VXX did not see 3C confirmation of the gap lower, which is what I've been waiting to see, the positive divegrence on the gap lower is what I expected to see and it is what we need to see in order to have a high probability timing marker for a market pivot in to a primary trend (down).

 Another view of the 1 min VXX, as mentioned Friday was the first day I saw the strong leading positives that turn to these near vertical "flying" divergences. This is excelent, normally we'd expect to see confirmation with a gap up in the market, this is the move down I thought the market needed before they'd accumulate in size and thus far they seem to be doing exactly that.

Don't forget that the relative strength in the VIX futures has been very strong vs the market, but last week the last 2 days the VIX Futures calls had seen double digit declines in premiums, it seemed no matter what they tried there was a solid bid for protection keeping it lofty, it almost seems they took a new tact to help knock them lower and we are seeing immediate results from that.



Don't be surprised if we have some VXX longs soon or calls.
 VXX 3 min is obviously seeing an increased ROC on the upside in 3C as prices drop below a support level.

And VXX 5 min has been in good shape, but it needs most all of the timeframes to be in this shape or better to be truly useful.

HYG 1 min intraday shows they are trying to give it some steering support, but the trend here is very clear, although HYG helps move the market up as a manipulation lever via algos, it seems no one wants to get caught with a position of any size.

5 min HYG trend is VERY clear without any drawings.

 As for the other market moving lever, the carry trades and USD/JPY specifically, the intraday 1 min action makes sense with the market action above, however the stronger trend on the 5 min chart shows something a little more ominous for the market...

I think the trend there is pretty clear, if this keeps up then it's just a matter of time before the 1 min charts give out and the signals of the longer charts like this 5 min kick in and the market follows.

Going to check on some individual trading assets and positions.

BIDU Follow Up

Thursday March 27th I posted this follow up to the BIDU core short position which is at a nice gain (equity short as a trending trade) and what I thought was most likely moving forward for either a new short position or an add-to for partial/phased in entries (NOT DOLLAR COST AVERAGING AS IT HAS EVOLVED).

First here's last week's BIDU Update...BIDU Core position follow up...

If you are interested in BIDU you might want to check out the post, but the gist of the update was,

"Right now at #6 we can see a daily hammer candlestick today, that's a bullish upside reversal, although it carries no target, but you can probably guess where a target might be based on the past. I'D TRADE BIDU LONG RIGHT NOW ON SOME CALLS AND THEN SHORT IT AS IT REACHED A HIGHER LEVEL ABOVE THE TRIANGLE AND FILL OUT MY CORE SHORT (I would not close the core short as it already has excellent positioning)....."

And where we stand as BIDU has transitioned from that daily bullish Hammer candlestick to the counter trend move up and it does not look strong which is what we want to see when looking to let a trade come to us and short it on price strength, but underlying moneyflow weakness.

 Daily chart with several head fake (Failed breakouts) from a large (technically ) bullish Ascending triangle, but when they are this large they are most often tops. The first and second head fake moves both would have lured in longs that buy on price confirmation of a breakout and put stops below former resistance/what becomes "support" and the market runs themm Both areas to the left were also "Tweezer Top" bearish candlestick reversal patterns showing resistance in the area. The 3rd head fake to the far right also would have triggered new longs on a break ABOVE former resistance found at the Tweezer top highs.

Then our bullish reversal, Hammer last week with increasing volume which is KEY to the reliability of transitional/reversal candlestick patterns , either bullish or bearish.

The same chart, #1 the first HF and Tweezer top, #2 second HF and TT, #3 the second bearish downside reversal with a bearish engulfing candle serving as confirmation of the top pattern in the candlesticks. #4 resistance from the Tweezer tops and #5 is the most recent head fake, causing longs to buy the "confirmed" price breakout which in typical head fake fashion fails and causes downside momentum as longs with different layered stops are taken out, adding supply to the market and driving prices down-THIS IS A KEY CONCEPT TO OUR "HEAD FAKE" CONCEPT WHICH CAN BE FOUND LINKED AT THE TOP RIGHT OF THE MEMBERS' SITE.

#6 is the Bullish "Hammer" reversal candle with expanding volume making it much more reliable, thus the update last week.

Here's a 30 min chart, you can see where support was broken on the Bullish Hammer and the short term exhaustion or capitulation event in volume making that  candlestick all the more reliable.

 I did not end up with a long BIDU position because the 10 min chart that has been in line and still is (if not slightly leading negative since prices moved up) never went positive which was my standard for a hitch-hking trade to the upside until a larger core short could be entered or added to.

 The 5 min chart had a positive divegrence at the hammer , but note the VERY typical reversal (rounding) process with a "Chimney" or a head fake that hits stops as we saw above with volume swelling.

Thus far since the hammer, I'm not impressed with price or price/3C action, it seems very weak which is fine with me as long as we can get a little more upside to make a new or add to position worthwhile.

 3 min showing the same small accumulation at the Hammer and so far NO confirmation of the move higher off the hammer, not even on a 3min chart.

 This is my custom DeMark inspired "Buy/Sell" indicator, note the sell signals to the left and the recent buy at the Hammer lows.

 On a 60 min chart my X-Over system has produced 2 of 3 long signals, but you really need all 3, that may happen, but again this is showing underlying weakness in BIDU as we expected to see, making it an excellent short candidate AS WE LET THE TRADE COME TO US RATHER THAN CHASING IT.

If you need a stop the 60 min Trend Channel has the current long stop at $151.90, however I'd be willing to give it a little more room and this is a stop on a CLOSING basis, NOT intraday.

So far, so good in BIDU, I'd set price alerts for higher levels where we want to look at adding or starting new positions, I have little doubt BIDU is an awesome short, I just want to make sure that any new entries are as favorable and timely as possible.

Early Indications...

Early indications confirm the "EARLY" Pump on 1 min charts, but as far as the dump part, we'll have to wait.

Even better, VXX is doing what we have been waiting for, the pump part is needed for VXX to give the signal I've been looking for.. The leading positive divergences in VXX are the signal I've been looking for almost 4 weeks now.

 SPY 1 min this is the late Friday accumulation mentioned in the post, "Monday" predicting a Pump early Monday. So far on the open we have confirmation, but this has been normal over the last 6 or so days, later comes the negative signals or turning signals.

SPY 5 min has a clearly distinctly different feel, this is a longer trend, but we did have a 5 min positive Thursday, a 1-day divergence.

SPY 5 min Here it is on a bearish traingle which Technical traders expect to break to the downside so the breakout to the upside as we predicted, in a sort of head fake or at least taking advantage of Technical traders' predictability.

QQQ 1min also shows the same late day (after 2 p.m. when the op-ex pin is lifted) accumulation that lef to our prediction of a pump early Monday, so far we have confirmation here as well as we did early Friday which slowly reversed.

QQQ 2 min showing the negative signal on Friday around the 11-ish highs and then the accumulation after 2 o.m. which was why I expected a pop Monday morning, but considering the 7- day pattern, it will likely be faded.

IWM 1 min showing the late Friday afternoon (after 2 p.m.) accumulation for Monday's pop as price is somewhat random the next day or especially over a weekend, but 3C signals tend to pick up right where they left off in the averages, this accumulation picked up with the pump.

So far we have confirmation of the gap in all of the averages...Same as Friday, it was around 11 or a bit before that signals faded and we could see the market would likely fade as it did in to the close.

IWM 5 min again is showing a similar negative "Bigger Picture" trend like the SPY, in fact the February rally/cycle's stage 3 top is clearly seen above and already starting to move in to stage 4 decline as expected BEFORE the rally even began with our trend expectations of early February (2/4/2014).

IWM 5 min shows the 1-day 5 min accumulation on Thursday, Friday's pump and fade , nothing to see yet today...

IWM 60 min and the Feb cycle from stage 1 to stage 2 rally to stage 3 top which is clearly morphing in to stage 4 decline.
 However my main point posting this chart is the strong 60 min signal and how long it has been telling us, "Get your shorts/portfolio together" as it has been leading to new negative lows.

As far as the point of ANY MARKET UPSIDE, we have expected it, but it hasn't been about a price based head fake, rather about pushing VIX futures down to be accumulated in a final signal for a transition to a serious downside pivot as was part of our trend prediction (up strongly and then down even stronger) in early February before the first point on the upside from the Feb rally showed up.

VXX 1 min is showing no confirmation of the gap down and instead is showing positive accumulation as we saw Friday, as we have been waiting to see, we are finally getting this move which I have been ultra-patient with, "Not entering until we get the signal with Flying leading divergences".

HYG 1 min and as usual the HYG algo fooling asset that makes algos think insstitutional money is in a risk on phase when they are actually accumulating VIX futures is showing PURE distribution again today even as the market averages chase it higher as they are programmed to do as they read higher HYG as institutional risk on sentiment...

***UPDATE

Just like Friday, since starting this post, we are already getting negative signals that suggest a loss of momentum , it was about the exact same time Friday we got them too.

These are early and just starting, but it is what we'd expect to see, PUMP and fade...

 SPY 1 min intraday going negative a bit

Q's just starting to join

As well as the IWM.

P&D DAY 7?

The opening futures pop last night was followed up with guess what? Even more PUMP leading to the 7th consecutive day we have had at least the Pump part of the pump and dump which seems to be working for algos or Institutional money as Friday's Pump was faded in the SPX by 11 a.m. through the rest of the day.

Friday's P&D, ramped until 11 a.m. and then faded the rest of the day

Because price is unpredictable over the weekend, we look at 3C signal;s the end of day Friday as they almost always pick up where they left off and once again Friday I posted Monday with the bottom line...

" my first inclination is another PUMP and DUMP Monday morning."

We'll see about the dump, but it makes some sense if we are moving to a downside pivot (Distribution)...

Even though USD/JPY led the pump on horrible Industrial Production and PMI prints, I don't think it was so much the prints with the market expecting more stimulus from the failed Abenomics/BOJ policy as the Yen destruction has ramped inflation, I think this is a 7-day pattern that was going to happen no matter what and we had signs of that late Friday.

USD/JPY is the clear leader of Index futures, but was it because of Japan or bound to happen anyway? I think the later.

 ES as of last night on the Sunday open, the 1 min chart (as I said I don't trust a signal to hold overnight and this one didn't as a few hours later it went positive (accumulation) and then...

ES this morning ramping around 6 a.m.

We'll watch for confirmation, but also watch for VXX accumulation, that is KEY, that' is what we have been waiting for for the 4th consecutive week now as a timing signal that we are going to pivot to the downside in  a primary trend move, not just a correction.

Sunday Night Open

As of the 3C indications the last two hours of Friday after the op-ex pin was lifted, I suspected we'd see another pump and dump which seems to be an algo program that is working for now and as long as it works, they'll keep running it.

Friday in the closing post I wrote,

"...my first inclination is another PUMP and DUMP Monday morning."


So far opening prices for the Index futures are higher, here's ES (SPX E- mini futures) ...

ES 1 min chart Sunday opening gap higher.

There's a 1 min negative 3C divergence, but I don't trust the 1 min charts to hold up overnight, still the point is a pump and dump seems to be the most likely outcome for early action tomorrow morning.

ALSO HIGHER... Remember our UGLD (3x long gold) position and GDX / NUGT (3x long gold miners)?

Gold has also opened higher in initial opening trade. We also opened an XLE April $90 Put and guess what, CL (Brent Crude Futures) are trading lower.

 YG (gold futures) higher in opening trade for the new week, again we have a min negative 3C divergence, but I also don't trust these to hold up overnight.

The more important 30 min chart has a very nice positive leading divergence.

 YG 30 min 3C leading positive.

Here are Brent Crude futures and as you can see they have been on a downward trajectory since late last week, thus the XLE Put position, even though oil is only 1 component of "Energy".

All of the carry pairs opened a bit higher, some look better than others, AUD/JPY looks better on a 3C chart, USD/JPY is about in line, but the 1 min EUR/JPY looks a bit weaker than the others, in fact quite a bit, but again it's only a 1 min chart at this point.

I suspect this week we will finish the work started Friday with HYG still getting torn up with distribution and VXX FINALLY putting in those flying divergences, something I've been waiting for about 3 weeks now, perhaps a bit more... this is important because VIX futures need to pull back to be accumulated and once they are, they can break out to the upside giving us a clean timing indication for a move down in the market, but not just a pullback... Since early February we expected the Feb. rally and the next trend we expected  was an even bigger Primary downtrend and a lower low that at least hits the SPX's 200-day (at the time), I suspect lower now.

 HYG distribution

VXX accumulation.


I expect this trend to continue and build until VXX looks like it's about to bust at the seems which can happen very quickly as we saw Friday, that should be a good marker for a market pivot to the downside.

I'll see you ion a few hours. Have a great week.