NFLX, Z, P, TWTR, PCLN, AAPL, SCTY, TSLA

There's a reason I have been loathe to call out any short trade ideas without seeing that IWM chart resolve and I think it will based on the last post and what I've been seeing throughout the day. The breadth charts give a VERY different impression so I will get those up.

Some of these are tradable right now for short term long swing trades, most could really benefit from a pullback and I'd want to double check whether it was accumulated, if it was in the IWM then chances are it would be in the rest of these. It's actually the breadth charts that represent stocks like these that look the worst which also is part of why the MSI looks so bad.

In any case, whether you chose to piggy back swing trade these or not is a risk you'll have to determine, I'll try to give you as much information as possible, but this is exactly why I haven't called out short trade ideas this week on what has been a bounce in most averages until yesterday, a very weak one.

P 5 min much like the IWM timeframe, I'd much prefer a pullback here before considering a piggy back long and I think with any of these you have to be right on top of them.

 NFLX 10 min, again a pullback here would be very useful as most of the divergence developed today.

Z 10 min is probably tradable right here long, maybe a call. In any case, if there's going to be a pullback, Z would likely feel it as well.

TWTR is not my favorite, I wouldn't be involved, but it needs a bounce before it's really in a reasonable short sale area.

 PCLN, again a pullback would make this much more attractive.

AAPL which needs and probably will get a pullback.

AAPL 3 min looking like a pullback, as I said before maybe in to the close, maybe Monday.

 SCTY is a nice short that has been working well for us, I'd definitely want a pullback for a piggy back long before looking at a short add to.

TSLA 10 min, again a pullback would set up a nice swing trade along the lines of an IWM move.

I'll keep these on the WL for any near term trades, but the overall feel of these popular momentum stocks just seems to add to the probability of an IWM led bounce.

2 P.M. OP-EX PIN SHOULD START FADING

And I'd really like to see it do so as there are short term trades that are on the edge in several assets, the core positions I think need to be left in place and look at the market in terms of the trade rather than in terms of a longer term trade, but making decisions based on intraday moves and signals, it doesn't match up.

In any case, there seems to be enough of the right kind of divergences in the 3 SPY arbitrage assets (HYG, TLT and VXX) on the right chart, 5 min, to allow the IWM 5 min positive divegrence to finally fire, however an intraday pullback that showed accumulation rather than just in line would go a long way toward confirming that probability and would let me know if short term piggy back trades are worthwhile, in my case, specifically the IWM call addition, however any number of leveraged ETFs would do the trick.

Looking at leveraged ETFs, inverse and just leveraged, I see a decent probability of the IWM bouncing, strangely though there's no confirmation for TQQQ/SQQQ therefore QQQ. I'm having the same kind of trouble with 3x leveraged SPY, DIA and XLF as well. What seems clear is at least a short term pullback as mentioned in the last post. The 10 min charts are solid for continued downside, it's the 5 min charts that are the near term bounce and thus far the only one that has a decent signal is the IWM.

 Again, it's the 5 min charts and not much beyond that. I took a quick look (there are too many charts to post intraday) at breadth indicators again which have seen a dramatic decline which I've only seen twice since I've been watching these which is at least once a week for probably close to 15 years, that was the 2007 top and right now. I'll get some example charts up at some point, so the 10 min negatives after a 5 min positive like this make perfect sense for a normal lower high/lower low trend which requires a bounce and it absolutely normal.


 QQQ 3 min intraday with a sharp negative divegrence, thus these should come down and that's where the useful information is, to see whether 3C accumulates the move down or confirms it or if it does both in different averages which is a possibility.

 QQQ 5 min has a positive divegrence at yesterday's lows/capitulation selling or volume event.  As I said yesterday, technical traders almost always take this as a bearish short term sign and expect the market to be down more the next day, but I've found it's almost always a short term reversal and by short term I mean often a day or so.

In this case, the QQQ 5 min divergence is very weak. After this comes the 10 min which is horrendous.

 IWM 1 min intraday shows distribution in to higher prices today, the question is whether there's accumulation in to lower prices, that's the game.

And the IWM 5 min has maintained a strong chart through the week despite it has made no bounce.

Here's an HYG 5 min chart with a positive, for the SPY Arbitrage (short term market manipulation lever), HYG needs to move up, TLT and VXX need to move down. However there's a lot going on with bond shortages and "fail to delivers" so the charts in bond related issues may be very complicated beyond what we'd normally expect.

Still, for now the 5 min TLT shows a negative which is in line with activating the SPY arbitrage.

VXX 1 min is leading positive intraday which is in line with a market decline very short term, as in the next tradable move, but...

The 5 min looks like it saw distribution in to yesterday's highs and is also in line with activating the SPY arbitrage which really just fools algos in to thinking the market is risk on as the defensive assets retreat and the risk on HY credit asset (HYG) moves up and the algos follow the signal, simple as that.

 Intraday the Most Shorted Index (yellow) vs the SPY tried to move higher on a squeeze one more time , it looks like the market is getting a little traction from that now, so our decline may have to wait until the close or perhaps Monday, we'll see what 3C charts look like at the close as they almost always pick up where they left off on the next trading day.

The bigger picture of Most Shorted Stocks is very much in line with the larger macro trends, the 10 min plus 3C charts, the market breadth charts falling apart dramatically, the 10-year rates nose-diving and the SKEW remaining very elevated while the F_E_D seems to be in an increasingly contradictory mood, almost panicked, actually panicked as they seem to have several problems on their hands from inflation mixed with REAL falling wages, not inflation adjusted, their balance sheet being inflationary and the whole lack of bonds for collateral as we saw at the end of April and Q2 with the F_E_D's reverse repo facility setting all-time record 1-day borrow highs as banks have no collateral to leverage up their assets which the F_E_D is increasingly concerned about as they sent out a letter asking dealers why there's such a large "fail to Deliver" in bonds, the answer is simple, the F_E_D owns most of them.

I Would Consider Day Trading / Fading this

 QQQ intraday

 IWM intraday

SPY intraday and...

All of the index futures are looking the same or worse.

Market to come down intraday

The intraday charts are falling apart pretty bad now as well as the TICK, we should see some market downside shortly, that should have some good information for us about what comes next and whether filling out those IWM calls makes sense.

Market Update

Here are the charts so far, you'll notice intraday a lot of distribution in to higher prices, but I still think the IWM has a strong enough chart that it can bounce and all of the volume yesterday that was picked up by market makers/specialists (as they are required by law to provide a bid and ask and accept any market order at that bid/ask) at lower prices will likely be off-loaded at higher prices/bounce.

Keeping this in mind, "if" the IWM comes down in price a bit today and "if" there's an intraday positive on that pullback, I may go ahead and add the rest of the call position in IWM that I was considering adding until yesterday's market just fell apart.

 SPY 1 min in line yesterday and negative on today's bounce.

The 5 min SPY has a relative positive divegrence from yesterday's lows/short term volume/capitulation event. This is more in line with the IWM, not nearly the same quality of divergence though.

 The larger trend when you take the noise out on a 10 min chart

QQQ also seeing negative divergences in to today's bounce.

 The same is seen out on a 3 min chart today.

 on a 5 min there's a minor relative positive divegrence so again these are not very good quality divergences, but they are the first time this week that they have had anything positive like the IWM has held all week.

 The larger picture since last week's positive divegrence that warned us that we'd see a bounce this week and its leading negative status overall right now.

 IWM intraday also in line with the move down yesterday or confirming it and a negative divegrence on today's bounce.

The same on a 2 min chart

The 5 min chart divergence has been in place all week, it just hasn't launched. I was going to add to calls on a move below support as long as it was accumulated,  it was not accumulated yesterday, thus the reason I did not add.

I have a feeling we will see some intraday downside, if it is accumulated, I'll likely add the rest of the calls for IWM.

 The larger trend on a 15 min chart...

This is the macro trend of the IWM H&S top so if you look to the far right, you can imagine a bounce from where we are now and it would look very much like the downtrend from the right said of the head in March/April, so the macro trend is very bearish, but it is normal to see bounces within a downtrend just like pullbacks within an uptrend. At this point, these bounces are very useful for entering or adding to short positions as well a short term swing trading, you have to remember, this is a top pattern, it hasn't begun a real stage 4 decline yet.

INTRADAY UPDATE

As posted last night, we had some pretty strong after hours positive divergences which I suspect was partly an oversold condition as the Dominant Price/Volume Relationship was one which usually results in a 1-day oversold event with a close higher the next day, but more importantly, options expiration where the max pain options pin has the potential to cause Wall Street to lose a lot of money or make a lot of money. Typically the pin has been somewhere near Thursday's range/close so this isn't surprising.




SPY price is right about in the middle of yesterday's range. At "A" we have a volume event, short term selling climax or capitulation, a bounce from here is not surprising at all.

Typically the max-pain pin moves throughout the day as different strikes are taken out. By 2 p.m. they usually have most contracts cleaned up and the market releases from the pin, today may be a bit different.

As for divergences, they are starting to go negative enough I'd expect an intraday pullback here soon, it may even be setting up the start of a larger negative divegrence to continue a stronger downside move, but the IWM charts are still in decent enough condition that they should be able to bounce and as they say, a rising tide lifts all boats, it may not lift them equally, but I'd expect the market to follow along.

I'll have charts up in just a few minutes, but the dominant theme once again today is "SELL ANY PRICE STRENGTH" thus far.

Trade Idea: (Swing Trade) DUST Long

We expected GDX/NUGT to make a bounce shortly after they crossed back below support this week, creating a larger false breakout.

That bounce was seen yesterday and exacerbated with the move in gold on global tensions and likely inflationary data from Bullard's comments about the size of the F_E_D's balance sheet being inflationary, but the larger overall trend is still for a GDX pullback (GLD too) and then a primary trend higher, I'd like to buy that pullback, but until it gets there, DUST should make a nice piggy back ride to the pullback area (DUST=3x short GDX).

The signals are looking pretty good for a DUST entry, although I'd like to see a gap fill, but I'm willing to enter a half size position here as it is low risk and if we get stronger signals or a gap fill, then I'll look at filling out the DUST long.

 GDX and the primary support/resistance line.

 This is the GDX gap I'd like to see filled to add to the DUSt position I'm going to enter as a partial position now. A stop can be put on a GDX move just a bit above the highs of this chart.

 GDX 1 min negative from yesterday as we expected to see.

 GDX 2 min leading negative divergence, again expected.

 GDX 3 min from in line to a negative divegrence

GDX 5 min showing the bounce positive divegrence and now the leading negative divegrence.

And the 10 min leading negative divegrence in GDX.

DUST 1 min leading positive, again I'd like to add to the position on a pullback in to the gap.

Here's a wider view of DUST 1 min

DUST 5 min leading positive

And JDSY+T with a strong leading positive 3 min divergence.

As I sid, for now I'm only going with a partial half size equity long in DUST, but if we get a bit of a gap fill, I'll add to it.

UNG Update

After what was probably an initial gap down due to Russian sanctions and an additional move lower on the 10:30 a.m. EIA Natural Gas weekly inventories, UNG seemed like it was starting to recover yesterday afternoon, UNG Update. What I wanted to and would like to continue seeing is more lateral movement to allow UNG to build a large enough base to carry on with the original divergences suggesting a decent bounce, Trade Idea (Short Term/Options) UNG Call.

Here are today's updated charts so far, again, as far as I'm concerned in the bigger picture of the trade ideas, so far so good.

 UNG 3 min leading positive in the flat range started yesterday.

 10 min relative positive at yesterday's range area.

 5 min NG Futures also leading positive

And 15 min NG futures also leading positive right at the range,'

If the range build clear support then there's a higher probability of a stop run just before an upside reversal. I'm not setting any alerts yet as its not a large enough range, but it is something to watch for.

A.M. Update

Good morning.

not surprisingly, we're still no closer to knowing what actually happened over the Ukraine (borderline Russian) skies yesterday, except of course to say a horrible tragedy. It seems there's not even clarity about what kind of ground to air missile system shot the flight down, much less who.

What we did find out is that the changes in character in the market continue to develop rapidly which is important because changes in character lead to changes in trends. As I mentioned last night, this is a market that has been, as CNBC referred to it yesterday in calling this a possible buying opportunity, a "Teflon " market, immune to the Arab Spring, numerous conflicts like Syria, etc. Yesterday was one of the first days I have actually seen the market as a whole rather than 1 specific sector, actually discount events in real time as markets were made to do, at least traditionally.

As mentioned in yesterday's wrap, the Dominant P/V relationship as well as the 3C positive divergences last night finally turned the market around 6:30-7 p.m. and it has recovered a good portion of yesterday's losses, this is not surprising given the amount of selling and I'm not talking about the percentage losses, but the TICK data extremes.

Today is also an options expiration Friday so a pin would not be unusual. Typically after 2 p.m. the maximum pain pin is released and we get some of the best data for the week ahead. So our IWM positive divegrence is still on the table.

Gold came down steadily since about noon yesterday, USO/oil looks set to come down as we suspected in the USO trade set up from Monday so we'll be looking at those today as well.