Market Update-NASDAQ Broad Upate

There are so many assets I'm trying to look at at one time as quickly as possible, however I have to take a moment at least beyond the intraday updates and remind you of the 3C macro picture as we have clearly seen the Leading Indicators macro themes, Futures Macro themes (I'll be covering Euro & EUR/USD shortly) and Market Breadth Macro themes, I'd be remiss if I didn't cover market macro themes as well so I'll try to do that with the QQQ before moving on to specific assets and trade opportunities, although I'm fully short SQQQ, SRTY and FAZ and will remain that way unless I see something that convinces me otherwise, but these macro themes individually or certainly together, argue for a very big downside opportunity beyond the October rally as I have maintained since before the October rally started when we were predicting it.

General intraday market update...

 1 min intraday was going negative before the minutes, that continues.

 The 2 min chart that would not confirm prices yesterday and judging by today, rightly so , instead calling the move distribution, is also deteriorating, thus it looks like the concept of migration is taking place since the minutes.

And the 3 min chart which also called distribution yesterday is also showing an overall negative divegrence and additional deterioration since the minutes.

I'll try to cover UPRO as the leveraged ETFs often show earlier and stronger signals than the averages.

 IWM 1 min with continued intraday deterioration

2 min with migration and deterioration and the trend...

IWM since turning down has been either in line or negative, but it has kept a beautiful 3C trend.

The Daily Trend Channel for the last several swings shows the trends and stop levels on the close, it's rather wide, especially for this particular trend so I've adjusted it to a more appropriate level below.

On a 60 min chart I've widened the channel's standard deviation by increasing width from 10 to 20, 2 SD's and the periods as this is a shorter timeframe to AVGC20 rather than 10 and channel width replaced the 11 bars with 21, Thus the Trend Channel has held the entire IWM uptrend without a single violation, the hash mark (red) to the left was the current stop which was not hit. The hash to the right is the current stop that was taken out on the close already, Friday, Monday and Tuesday all on a closing basis.

 This is the intraday TICK which after initial minutes volatility has moved to a downtrend and is below -1500. There's some minor volatility in it since this capture minutes ago.

QQQ

 The intraday 1 min like the others seeing deterioration which started before the minutes.

 migration to the 2 min chart which called distribution yesterday as well

And now migration to the 3 min chart (,these are in the context of a new divergence starting at the positive at this morning's lows.

The bigger picture 15 min chart is pretty plain to see.

As is the 30 min chart and a similar 60 min chart.

The macro picture is below...

The 2 hour chart showing #1 the late July divergence ; #2 the early August divergence/base, #3 the August stage 3 top and distribution in to the head fake move in September at #4 with a decline to the October lows, this put in the lower low we were expecting when first calling for the August rally days before it started.

And of course #6 speaks for itself, this is the kind of divergence I expected to see being the rally itself was a face ripping move meant to drastically change sentiment which at the time was about as negative as it gets with everyone calling a top.

Market Update

As mentioned just before the minutes, the 3x long SPX, UPRO was not looking good in to the minutes release. Since the minutes and a very minor reaction, not a knee jerk, the negative divegrence of one of the last market updates has continued. I'll be posting charts next as well as looking at specific assets to se if this may indeed be that crack after the Nikkei's crack and dead cat bounce and yesterday's apparent head fake move.

Trade Idea: (Speculative) Re-entering GLD Short via GLD

I will be entering this as a full size position because I'm not using the leveraged ETF. Other than the charts posted before the minutes, one of the near term catalysts that I suspect will play out in gold are the F_E_D's lower inflation expectations near term. Gold is bought on inflation expectations, usually not on actual inflation, but before that on expectations and right now the inflation expectations short term are not very high as was evident in the F_E_D minutes. I'll likely keep a pretty tight stop (relative to my risk tolerance which is pretty high) and will be watching very carefully for further 3C signals confirming or not confirming this position.

UPRO not looking good in to minutes

Gold Still Doesn't Look Right

Even after yesterday's call and today's trade with the recovery in GLD as expected, something still doesn't look right.

 GLD 1 min has seen no 3C recovery, in fact negative, not as bad as yesterday, but...

 Gold Futures 1 min, not a huge divegrence, but...

Gold futures 5 min negative

Gold futures 7 min negative

UGLD 3x long gold

10 min UGLD

and 10 min 3x short GLD, DGLD...

Interesting

Leading Indicators Quiet Before Minutes

I've seen and heard some say the gold move today (down) was due to a possible leak in the Swiss gold referendum's polls (no vote yet), however when the results of the poll were officially announced this morning, gold recovered which does not explain the 3C drop yesterday and the swift move that we predicted and played to perfection in DGLD, nor does it explain the other divergences like TLT, TBT, and even $USD.
In any case, I've heard everything from minutes being leaked which did happen in 2013, but so far I don't see what this was actually about, although it was definitely about something as it was nearly market wide and fast.

For instance, look at the $USD this morning...similar to gold's move except essentially the opposite of the $USD's legacy arbitrage for precious metals.

A quick drop and recovery in the $USDX with a positive divegrence currently.

As for leading indicators, they seem to be on the question mark side like most other assets (trading action today).

 Intraday is not exciting, it's still the MACRO trends and recent trends that seem to say the most like this SPX/RUT Ratio indicator not confirming, but calling for a move lower in SPX.

On a long term scale, these are the signals in the indicator calling the July decline, the August lows, the September head fake move and decline, the October lows and rally, and negative again now with a large divergence between points #1 and #2 as well.

VIX is outperforming SPX by a bit today , but it has been the recent trend that speaks loudest...

VIX WAY outperforming the SPX and since the VIX custom indicator buy signal below..

 There have only been 2 signals this year, VIX moves opposite the market so the first was a sell right at the October lows before the rally and VIX drop and a recent buy signal in which VIX has been trending up since. The last signal was an October 2013 VIX sell signal .

HYG's trend speaks the loudest, intraday it may have helped on the bounce, but remains below yesterday's close or in the red.

And the HY Credit trend, more or less flat today.

Pro sentiment is more or less flat, but with a horrible large trend in the leading indicator.

I'll be silent just after the minutes release looking for market opportunities, information and trying to find anything unique in the minutes, but I'll be back with updates ASAP and if I see anything we can use.

Intraday Charts

TODAY HAS BEEN STRANGE AS I IDENTIFIED LATE YESTERDAY STARTING WITH GLD. YOU MAY ALSO RECALL I SAW NEGATIVES, BUT VERY SHORT TERM IN TLT WHICH HAS MOVED LOWER SENDING 30-YEAR RATES HIGHER, TBT POSITIVE, BUT SHORT TERM AND IT IS UP, HIGHER EARLIER. THE GOLD CHART IS RIGHT ON YESTERDAY'S ANALYSIS AND WE SOLD DGLD AT EXACTLY THE RIGHT TIME.

I'm not sure what these very strange late day signals meant, but they have played out EXACTLY as envisioned, something is clearly afoot, a Wall St. scheme, what it is is difficuklt to say as the Key-1-day Reversal is out of the question for today at least.


Here are the charts from the last update...

 30 year yields gapped up on TLT's gap down, mentioned yesterday in the late day post, F_O_M_C Minutes Shakeout

"TBT, 2x short TLT looks like it is set for a small pop, perhaps pre-minutes release, but like GLD, it looks like a small move, though sharp, just like a head fake."

This is the exact reason yields are higher, TBT popped and TLT dropped as expected.


 But even before that we saw something along the exact same lines, it effected nearly every asset, that was initially in GLD , Trade Idea (speculative) GLD / DGLD , before I realized how pervasive it was.

"It looks like GLD is going to see a quick move to the downside, I suspect after that, it makes a move higher. "

 And GLD this morning with yesterday's 3x short GLD position, DGLD closed at the lows as volume picked up this morning, a sign a change in character and trend is ahead and true to yesterday's forecast, " I suspect after that, it makes a move higher. "

 This is today's internals via TICK, note most of the time below +500 and -750 which is very moderate with larger extremes down to -1450 confirming actual strong selling. The trend has broken since the last update expecting a bounce off the lows intraday.

This is SPY 1 min

And the 3 min chart continues negative as it was yesterday.

QQQ 1 min has gone negative, also implying an intraday turn down

Yesterday's distribution shows a little better than in line on the 2 min, but as the 1 min deteriorates it should migrate to the 2 min as these are new divergences from today specifically ((new divergences always start on the fastest timeframes).

 And 1 min IWM positive intraday and now negative

With IWM's trend of distribution through yesterday being no more than in line as it has been since the IWM lost -2% trending lower the last trading week.

DIA intraday positive at morning lows to a negative now and...

The larger 3 min chart with a small positive this morning at the lows and negative now.

I suspect we hang around this area, not straying too far before the minutes at 2 p.m.

Remember, watch-out for the knee jerk reaction, we may be able to use it.

Quick Market Update

I'll have the charts out, but SPY , QQQ and IWM intraday all have turned negative, you may remember earlier it was the 1 min charts that turned positive for today's counter trend upside correction, those same charts are turning negative and TIVCK is failing as well.

Charts coming.

UNG Update

I know several of you are still very interested in UNG positions and I suspect you'll have another chance at a pullback. UNG made a classic head fake move, one we identified weeks before it happened (Sept. 29th), this was a great area to pick up UNG or the 3x leveraged UGAZ long. After the 11/6 breakout, the chances of a pullback were very high which was another great entry area. UNG was covered on November 6th with Fundamentals as well in UNG Fundamentals (Oil-WTI as well), this was the day of the breakout on a strong +5.46% move. The post ended...


"And on the breakout, thus far, as parabolic as today's move is,  we have confirmation of the trend.

If there's to be a pullback (in case you want to buy UNG), I don't think it's quite here and I personally would not chase this move, but wait for a pullback.

We want to watch for the price rate of change and look for it to start falling off and any lateral consolidation, that's where we may get a decent high probability pullback."

And... One of the last major UNG Updates from November 10th, UNG Update started with the following...

"After last Thursday's Breakout move in UNG, my preference as always is not to chase price, but let it come to you on your terms in which you can confirm the trade's strength, get a better entry and lower risk, it just requires patience and occasionally passing on some trades you are interested in."

Without even using 3C, if you applied the Price Rate of Change, you not only saw the probability of a pullback, but where it ended and where the buy area would have been...

And like clockwork, UNG gave us a beautiful pullback to range support. Here's a quick overview of UNG events.

After the failed breakout on Sept. 29th which we said on that day, "If t fails, it will move under the range to gather momentum" which it did and broke out at #4 which is the current breakout and pullback being discussed above, the pullback at #5.

If you used Rate of Change, one of the simplest and most overlooked indicators with incredible value, as I mentioned above you could use this alone to determine the pullback buy area.

"We want to watch for the price rate of change and look for it to start falling off and any lateral consolidation, that's where we may get a decent high probability pullback." 11/6/2014

Here's UNG with ROC attached to price, note the negative ROC divegrence at the breakout and days just after leading to the lower end of the range where a positive momentum divergence was put in, that was your buy signal.

Some stock charting software only lets you attach ROC as a Child Indicator to other indicators and not price, in this case attach a 1 bar moving average which is no averaging at all, but price exactly as it is and make it invisible, if you can't make it invisible using line prices will cover the moving average as they'll be exactly the same or if using bar/candlesticks, you'll have a small line through price, not distracting at all as if follow price. Attach ROC to the 1-bar moving average, that's the way around programs that won't allow you to attach it to price directly.

 So we are looking for a pullback in UNG once again, the same methods can be used, however when looking at the big picture, I do believe Natural Gas will enter a secular bull market, meaning a long term bull market and likely be one of the leaders while most stocks are in pain. In that context, UNG is still exceptionally low in its base.

The charts now suggest a resistance area has been hit, remember tomorrow morning the EIA releases Natural Gas inventories...

 Again our map of events. The large triangle consolidation from February to late June showed strong signals of a deep pullback in UNG, thus some of the DGAZ (3x short UNG) trades at the time, that's at the red arrow as price finally breaks from the large range.

UNG formed a new lateral or rectangle range, at #1 was the breakout attempt of 9/29 which was legitimate, but was unsure whether it would make it. In 9/29's update, UNG / UGAZ Follow Up, it was clear if he breakout did not succeed with a strong close and higher volume that day, we'd see a move below the range, similar to the Channel Buster concept, but to accumulate and set a bear trap to power through a real breakout.

From that post, UNG / UGAZ Follow Up (so you understand the psychology of these types of moves)...

"There is profit taking on the move as it is very parabolic which I wish it weren't, as impressive as they look, I don't trust parabolic moves.... Volume increasing at the close and holding the breakout would go a long way toward confirming this breakout and of course the one thing the market can't do on the upside (but does easily on the downside) is follow through with additional gains the next day or within the next week as they often will consolidate a bit after a breakout.

Here's the range and if this weren't a commodity, I'd say a downside head fake/stop run below support would be extremely high probability, I simply had no evidence that this was any probability as of the 24th and still don't unless this breakout fails"

 This is what happened after that breakout failed, a move below the range, but again price is deceptive. We were able to predict this as a probability weeks before if the breakout didn't make it, the reason is not UNG weakness, but a chance to accumulate UNG at lower prices, build a base, trap shorts and then use that to squeeze them and create the breakout that September 29th couldn't pull off on it's own. We have seen numerous examples of this and covered them including in XLF recently (posted).

Right now the last pivot high saw minor distribution on a 15 min chart, but as we approach the same resistance level, 3C is not confirming, suggesting all of the gaps recently made below, are likely to be filled in a pullback from here.

I still have a UGAZ (3x long UNG) position that I'm treating as a core long position and don't intend at this time to try to trade around it, right now it's at over a +28% gain...

At current prices it is at a +32% gain, but even on a pullback I intend to leave this in place and not try to get too fancy unless I see strong reason to abandon the position.

 The short term 3 min chart shows distribution at the most recent move up today and at the last pivot high, forming a resistance zone around a psychological magnet, $23.50.

The 2 min chart shows the accumulation from the last pivot high's decline and this run higher, but it too is showing distribution, not heavy, but on the scale of a pullback as there are a couple of gaps below.

 And the 1 min showing the same accumulation and short term distribution. Again, these are short term signals in line with a pullback from a resistance area, not anything wrong with UNG in a larger sense.

Just as confirmation, I checked on Nat. Gas futures as well and found the same...

 60 min chart showing the head fake (under the range) accumulation in large size and breakout, this is in good shape and mostly in line, however...

The shorter term 15 min chart shows a negative divergence at the same place as the UNG charts above so I suspect those of you looking for a UNG long will get another chance, just remember in terms of the big picture, we are virtually at the lows, when looking back a year from now, I doubt you'll even be able to distinguish these pullback areas.

Good luck!