Trade Idea: SPY PUTS

I'm going to enter what I think for the moment, will be a short term trade, however the longer term set up I don't think is far behind and I think you'll understand what I mean when I get out the next Broad Market Update I'm working on.

In the meantime, I'm looking for a quick move down in the market, I'm targeting the SPY April $190 PUTS, full position size.

Not only do the intraday charts support it, but a lot of Leading Indicators, you'll see all of these shortly.

Quick Market Update

I will get charts out ASAP, but I needed to get this out at least, right now the intraday (and beyond in many cases) 3C charts of the averages (SPY, IWM, etc.) are looking real bad.

I'd consider opening some shorts, but for me this is ALL about VXX and those crazy leading vertical divergences, VXX is putting in the work, it is putting in the skeleton of those divergences, it just needs to be fleshed out a bit more and that's where I want to enter as VXX / VIX futures HAVE ALWAYS been the timing indication for shorts that I've been watching for, I believe this is the 4th week now and it just started last Friday and continues today.

GLD / NUGT

Just a quick note, despite the gap in NUGT and GLD/UGLD (as the market has been ruthlessly filling gaps the last 4-5 years), I have NO intention of letting go of either long position.

If I had calls on GDX with a gain, I'd probably take them and look for a new entry, as far as calls on GDX still in the red, so long as the calls are at least out to April (standard), I have no problem holding them.

NUGT is up 9.34% today, UGLD is up +2.26% thus far.

MCP Trade Idea Reiteration

The first recent trade idea long MCP from 3/25 is here. Yesterday's update is here.

There was a possible intraday head fake move that I had alerts set for, but otherwise I had already filled out MCP to max position size.

I just looked it over and while there are some things in the market that are looking pretty ugly, I still like MCP long a lot and wanted to reiterate that as I look at today's charts.

Remember it's still in a decent place as the head fake move below the triangle gave us a nice little discount and lower risk. I don't like chasing, but we are still below the apex of the triangle.

TSLA TRADE FOLLOW UP

On the 28th I posted TSLA Update & Possible Trade Set-Up, we were looking for a gap fill from the 28th which happened the next day on the 31st as a long / Call entry.

Since then there has been some chop, but a decent little trend to the upside.

If I were still in the position, I'd start considering taking some profits off the table, especially in option positions, long equity may have a bit more room.

Here's what I mean... and this is likely to end up as a nice short entry soon as well due to the probabilities (longer charts), but we aren't there yet..

 This was the last update and the gap fill we were looking for as a position entry which came the next day on the 31st.

This is a broad "W", this is why I like this still as a long equity position, not sure I'd chase it here, but as a call position, I might tighten up standards, especially at resistance like this.

This is that same "W" on a daily chart...

 Overall the 4 hour chart tells me the probabilities are that this sets up as a nice longer term short position, looking at the daily chart there is a negative divegrence, but it is far from the worst looking asset, still it should move well on a good short entry.

This 15 min chart's leading positive divegrence (notice how much it leads on the 31st and right after) is the reason I like this as an equity long still, as far as calls right now, in my view they are to be managed, not entered at this stage unless an opportunity comes up.

Intraday 1 min looks to be in line, but...

The 1 min trend on a breakout shows there';s less 3C backing now at the breakout than there was at the last resistance high.

 The 2 min chart shows a mini "W" on the 31st, this is what I mean by, "Our concepts are fractal and work in all timeframes and all assets". Note the intraday distribution taking place as the breakout takes place, this is why I'd be watching calls very carefully, I want to be out before momentum dies and you can always re-enter them on a pullback. The equity long however doesn't have the same issues and that 15 min chart still looks good for TSLA.

Here's the 60 min chart's "W" on a daily chart, you can see the gap fill and then some, likely hitting orders/stops below the gap.

I'M SETTING ALERTS FOR A PULLBACK AND HOPEFULLY CAN GET A DECENT CONSTRUCTIVE PULLBACK TO EITHER ENTER CALLS OR LONG EQUITY POSITION.

 THE 3 MIN IS NEGATIVE TOO SO IT LOOKS LIKE THERE'S BEEN SOLID PROFIT TAKING IN TO THE BREAKOUT TODAY.

This is the 5 min chart.

As I said above, I think this is more about management of current positions right now, hopefully there's a long position that opens up with better prices and lower risk to play that 125 min chart and make sure it holds.

Eventually that should lead to a nice short set up.

Good luck 

FXP Update

FXP is a long in the trading portfolio, I have my mom in the asset as well for full disclosure.

FXP is UltraShort (2x) FTSE/Xinhua China 25 ETF.

I've been looking for a way to play China short including Aluminum as companies that received shadow banking loans using their mining materials like copper and iron ore as collateral, the banks have been flush with cash, but not loaning and in fact, calling the cash which caused many of these mining companies ( a large industry in China) to sell their tangible assets (commodities) to meet the cash calls, thus the fall in copper, iron ore and I suspect Aluminum will be next.

FXP was my first choice, but it had not pulled back through 2014 as bad news keeps coming out of China, from bubbles to hot money flows, inflation, and most recently credit defaults.

Typically local governments or banks bailed out any companies that couldn't meet their coupon payments, just yesterday a high yield materials company failed to meet a 10% High Yield coupon payment, it seems today they were bailed out, which means it's likely that there is an impression, right or wrong...sentiment is all that matters, that China may start bailing some of these companies out, however I doubt it (I think this is an isolated incident). In my opinion the Chinese government is trying to establish free market principles so the days of investing hot money flows in High Yield Chinese bonds that have been backstopped by the government so they were virtually risk free up until recently, are now over causing bond traders to re-value all investments and discount real risk of failure or defaults.

Overnight the Chinese money market rate increased for a 7th day in a row as the PBoC drained liquidity out of the system at the regularly scheduled Tuesday/Thursday market operations.

Finally FXP pulled back as a Channel Buster, I'll put up a link explaining Channel Busters, but typically the initial break from the channel (up or down, depending on the trend) is faded, it's like a large head fake move, making the Channel Buster an ideal entry.

Here are the charts for FXP, I really like this one, I'd prefer to phase in to the position if possible, I believe it can be considered a core or trend position.

 Here's the 2014 Trend Channel and the Channel Buster below, these use to pullback to the former support trendline (now resistance) and fail, they'd make great shorts there and then head back down.

However since the change in Technical Analysis with the advent of the Internet all of these century long concepts are used AGAINST technical traders and this kind of move more often than not will move not only back in the channel, but often shoot through the top of the channel and/or continue the trend higher.

 Here's the reversal process, there's a nice rounding as well as a capitulation event and 3C confirmation.

The X-Over system is just starting to signal a long position.

Here's the 60 min chart, the distribution for the break of the channel is VERY obvious, however, so is the 60 min accumulation/leading positive divegrence.

As far as timing, there are some short term charts I'd like to see look a bit better and this is why I said I'd prefer to phase in to the position.

There are some shorter term charts that look outstanding , at this point in my view they are all just for timing, I think the long position and objective data supporting it have been established.

This looks like an ascending (bullish ) triangle, but it should fall in place amid an uptrend, so it likely is not, but technical traders usually don't care about the rules to verifying a pattern, they just see it and assume, so there may still be a head fake move to run stops below the $66.50 level especially because this morning did make a "breakout" of the triangle  around the $67 level (note the whole number) which some retail traders may have entered the position on breakout confirmation. Their stops would likely be just below the triangle's apex and lower trendline in the $66.50 area, I'd set an alert for a move below that area as a potential area to add or establish a new position, especially if you are phasing in to the position.

I REALLY LIKE THIS ONE, AS I SAID, I HAVE MOM IN IT.

Market Update

We keep seeing continued deterioration, it's not at CRITICAL, but it is doing as it should considering the VXX accumulation. The VIX options (VXX) are still seeing front month deterioration in the premium, but it has slowed and the May contracts that were also falling double digits are holding their ground, Changes in character lead to changes in trends.

First the averages...

 DIA 1 min

DIA 2 min seeing negative migration

Now the 3 min is seeing the same migration

IWM 1 min negative

QQQ is still just about in line

SPY 1 min is seeing continued deterioration, I'm thinking of starting to phase in to some short positions.

SPY 2 min is seeing negative migration intraday as well

As is the 3 min

HYG 2 min looks like they are still trying to support it, but this is still only a 2 min chart.

This is the 5 min chart, major deterioration.

Meanwhile VXX accumulation, THE VERY THING I'VE BEEN LOOKING FOR THE LAST SEVERAL WEEKS,  continues at an increased pace.

We'll take a look at some of the open positions as far as management as well.

NOTICE

I've been having some intermittent internet connection problems this morning, I'm moving to a different location now.

Posts will resume in about 15 minutes.

Opening Indications

Thus far on the open things are not looking very good for the market, in fact the base from last Thursday on 5 min charts is a mini cycle in itself and it looks like it's starting to fail.

Take a look...

First the Index futures on 5 min charts which is the most relevant timeframe for our purposes...

 ES 5 min, note the trend since last Friday and the falling off of 3C recently

The same is evident in the NASDAQ 100 futures, NQ

And now TF is starting.

As far as intraday...

ES has a small intraday positive that should kick in intraday soon.

As for the averages.

 SPY 1 min on the open, but zoom out a bit and...

All of the sudden the recent trend DOES NOT look very good.

 Here's the 5 min trend that is not confirming, the 2 and 3 min need to go negative and show migration, but at this rate they should soon.

The QQQ confirmation on the open...

And the 5 min trend is still showing confirmation for the time being, Futures look worse.

At 10 mins there's no confirmation

 IWM 1 min opening confirmation

Zoomed out the 1 min is in leading negative position.

 Migration is already hitting the IWM with the 2 min leading negative


As well as the 3 min ...

HYG "looked" like it was starting to see some accumulation yesterday to help push the market, that seems to have faded and was likely to be just enough to halt a decline in HYG.

No More Reiteration, GLD and NUGT are Starting their run

I reiterated Buy on GLD and GDX or the 3x leveraged UGLD and NUGT.

Apparently the news for the move is a Russian retaliation over a JPM block of a Russian Embassy transfer of $5,000 by JPM under the pretext of US sanctions. The move is said to have occurred because of threats of retaliation and JPM has a large and very active gold vault. Russia's Foreign Minister called the move "Illegal and Absurd" adding further...

"

“Any hostile actions against the Russian diplomatic mission are not only a grossest violation of international law, but are also fraught with countermeasures that unavoidably will affect activities of the embassy and consulates of the U.S. in Russia,” Lukashevich said."

 However, that's kind of hard to swallow being we've been tracking and reiterating so often, in fact...

 Here's the divergence yesterday and this morning's confirmation already out to the 3 min chart in early trade.

Here's NUGT's 3 min chart with confirmation of the gap up in early trade.

Right now UGLD is up nearly 3% while NUGT is up over 8%.

I'd stick with both as I believe both are in counter trend rallies which are some of the strongest rallies you'll see during a bearish trend which both have been under.