The Dump

By now you have heard that reactor the nuclear facility in Japan has at least 4 reactors near meltdown and radio active particles have hit Tokyo at at least 23x normal levels. This sent the Nikkei down 16%. TSE has halted futures trading in an effort to contain the market meltdown. As you you saw from my earlier post, US Treasuries are being sold off, most likely this started in Japan, but as they say, when a butterfly flaps its wings...

The European markets were hit next, down substantially.

The Bank of Japan has stepped up purchases in the open market to provide liquidity-THIS IS THE EXACT PROBLEM I'VE BEEN HIGHLIGHTING IN MY VIDEOS FOR WELL OVER A MONTH NOW-THE MARKET STRUCTURE HAS BEEN SEVERELY UNDERMINED BY HFT FIRMS, THERE IS NO LIQUIDITY MAKING SELL-OFFS WORSE BY AN UNKNOWN MAGNITUDE AS WE HAVE NEVER FACED THIS KIND OF LIQUIDITY CRUNCH.

In Bahrain, the first casualties from the Saudi side have come in. More Saudi troops are being sent in-this is serious as THIS IS a religious event like no other protest before. More dangerously, as the Saudis step in to assist the Sunni, Bahrain Royals, the images of Sunnis killing Shiite protesters raises the stakes that Iran may step in on the Shiite side, you can be sure they are supplying and training them as well as providing intelligence already. Who would think Bahrain would be the flash point? Any Iranian intervention would be met by the massive US 5th Fleet. Now you can appreciate the market's panic a bit more acutely.

Here at home, another Beat for the Empire Manufacturing Index, but as usual, behind the headlines, prices paid or input costs continue to rise and are now at 3 year highs. Inflation is coming, watch for action out of the Fed within the next day or so. What they should do and what they will do most likely will not be the same. Be careful of initial knee jerk reactions to the Fed, they are nearly almost always reversed within a few days.

Earlier before the market opened, the NYSE invoked rule 48. That's the difference between the NASDAQ and the NYSE.  Supply/Demand and orders set the opening price on the NASDAQ, Specialists set the opening price, sometimes arbitrarily, on the NYSE. Rule 48 says that the specialists DO NOT NEED TO PROVIDE OPENING INDICATIONS and this is one reason many professional traders WILL NOT trade NYSE stocks. Usually, the Specialists will open the market at what they believe will be the market's morning lows, thus we usually see a bounce off the open, that's happening now.

As I have been saying for months, "one headline can send this market plummeting" and this is why I raised the stakes from "toes in the water" to "feet in the water" up to 50% short and up to 50% in cash with smaller/reduced long positions and leverage/margin.

Market updates are coming. The most destabilizing event now will be the soon to come, Fed announcement that hasn't been scheduled. The Plunge Protection Team will do something, just keep your eye on the big picture-look at multi-day charts and don't get caught up in the Fed hype. I've also said numerous times , the idea of "don't fight the Fed" is not bullet proof. The market fights the Fed and almost always wins. Keep that in mind when they finally emerge.

TMV Trade Alert (short)

TMV broke a trendline making it a short idea.

You can see the false breakout of the triangle-a perfect start of a setup, now we have the definitive break. I'd consider this one a short.

OMX Trade Alert (Short)

I consider OMX a short under $12.74-it's around the area now. Keep it on your radar.

GRA Trade Alert (short)

This one triggered when it broke the neck line of a small, slanting H&S top at $35.50

ENTR Trade (short)

ENTR has dropped below the area I was watching for a high probability short sale trade under $7.65

APOG Trade Idea

I consider this one a short under $12.70 on a close, it's in the area now.

Scientists Say Japan Can Expect Another 8 Quake

Here's the story

USO update

See my earlier post today on USO.

We were expecting some more downside from USO-at least before Japan-again see my earlier post today for a more complete explanation. While nothing goes straight up or down and this could just be a wobble in the down trend, the 1 min chart has been exceptionally strong today.

Here's the 1 min chart showing a positive divergence most of the day. I mentioned earlier the dynamics of Japan and how it could effect oil, one new dynamic would be oil traders front running Japan's eventual energy needs once refineries and ports are re-opened. We need to watch and see if this is just a wobble in the downtrend which is intermediate in scope as we expect new highs in USO, or if this is the front running of the trade I mentioned earlier.

TSO Update

TSO's volume today has been excellent, I'd like to see it close above $25.83. The intraday chart appears that it is putting in an ascending triangle which is a bullish continuation pattern. This pattern is very obvious, thus we often see a false breakdown right before a new leg up, that may be what is happening right now.

AAPL showing some EOD intraday weakness

I've been watching AAPL today to see if it puts in a possible short sale signal candle today. It's been stronger then the broader market, but looks are deceiving until you get into the internals, a place few venture.

AAPL 1 min chart showing a negative divergence-contrast that to the QQQQ of which it is the heaviest weighted index component.

The Q's are still trading in line on the earlier intraday bounce, maybe even a bit stronger, so why the weakness in AAPL?