I'll update as soon as there's some short term end movement.
7 years ago
Tuesday, August 2, 2011
Market Update
We remain in a tight range over the last nearly 2 hours, however, while there hasn't been much movement on the short time frame end, there has been some movement on the longer 15 min charts.
SPY range
DIA improvement
IWM improvement
QQQ improvement
And the SPY holding about steady.
I'll update as soon as there's some short term end movement.
I'll update as soon as there's some short term end movement.
The changes in the 1 min I mentioned
These aren't big changes yet, the reason I mention them is they are the first changes.
DIA
IWM, by far the strongest
QQQ
SPY
The TICK close to breaking the down channel
3C on the TICK chart.
Fishing in Darkpools?
Right now, the IWM, QQQ, SPY and DIA with the DIA and IWM being the strongest, are all starting to show signs of 1 min positive divergences.
I mentioned a shakeout being likely in the last update, however....
Looking at these small probing actions in the SPY makes me wonder if there's an algo or two fishing for stops in the Dark Pools? The Dark Pools are called that because their trades, bids/offers aren't on the books, they only show up on the daily consolidated tape. The only way to uncover what might be called an "Iceberg" such as a large order to buy or sell, is through probing actions or what is known as "pinging".
There are quite a few dark pools and it's something the SEC really ought to address.
I mentioned a shakeout being likely in the last update, however....
There are quite a few dark pools and it's something the SEC really ought to address.
Trade Idea RVBD (long)
This s a stock I've been watching with a member, it's a potential takeover candidate and otherwise in pretty good position as a low risk trade.
Usually after a first break of support we see a significant bounce/rally and RVBD has managed to fend off follow through selling.
The daily chart is positive, which is no small thing.
and the 60 min
the 15 min
And the 10 min.
I think the risk is low enough here and the indications are strong enough to warrant a close look at RVBD as a potential long trade.
I think the risk is low enough here and the indications are strong enough to warrant a close look at RVBD as a potential long trade.
Looks like SPY ...
Is headed for a test of yesterday's lows, perhaps a shakeout, we'll have to see what the signals are at that point, as usual, most reversals start with a solid head fake.
Opening indications
UUP/$USD Update
Since we have some movement in UUP, I think it's time for an update.
You may recall UUP was under some heavy accumulation last week.
UUP 1 min shows us a bad opening for UUP on the 1 min chart, it opened negatively divergent and has already seen some downside this a.m.
The 5 min chart shows this to be a more serious problem then just a negative divergence on a 1 min chart.
As does the 10 min chart
And the 15 min, you can see last week's accumulation as well.
The 30 min chart suggests UUP will see continued accumulation for what will probably be a large move up in the $USD
The 60 min chart suggests the same.
Remember that UUP has an inverse relationship with the market and most asset classes, it would make sense to see some strength in the market while UUP returns to the lower range to go through a second round of accumulation. A failure in the market, could then send UUP higher on what would likely be a decent move up over a period of weeks.
You may recall UUP was under some heavy accumulation last week.
Monday, August 1, 2011
Closing Wrap
Quite a while back a subscriber to Worden had mentioned in the Worden report a 9-period based trading system, I don't recall all the specifics, but fooled around a bit with StockFinder's BackScanner and created a scenario in which a stock had to be declining for (2) 9-day periods and that was the buy signal. This is what the market looks like now.
To make it more interesting I should have added the 200 day moving average as support, that's more what the market looks like now.
In any case, I ran the scan on the S&P-100 for a year to date. I wasn't trying to create a trading system so I didn't work to optimize the exit strategy, the third 9-period bar just had to produce a gain.
Here are the results
More or less, this is a type of oversold system, I was just interested in seeing what the statistics would look like. As you can see, 82% of the time the 3rd 9-day period would produce a gain. This isn't part of my analysis, just an interesting aside that may have some potential as a trading system in the future.
As for tonight's Price/Volume Relationship, there was no DOMINANT relationship, except in the the Dow-30 and NASDAQ 100, which were both Price Down/Volume Down. You may remember of the 4 relationships, this is the most ambiguous, and the most common relationship seen in a bear market. Looking at the relationship in context of the current environment, it simply tells us that selling wasn't as urgent today in the two averages with the dominant P/V relationship.
As I showed you today, many of the indices saw divergences move to the 30 and even 60 min charts, this is a bit rare and signals underlying strength.
As for today, I mentioned the game will still be played and Wall Street does NOT want the longs lining up on one side of the ship before a move commences, they need someone to offload their positions to and if everyone has jumped in long as it seemed this morning, it's harder to create that demand. To beat Wall Street you need to think like Wall Street. Unfortunately we are decent people and the evil, "stop at nothing to destroy anyone and everyone" mentality does not come naturally to us. This s why I encourage you to keep a trade journal or a market journal and go back after a month has passed and you have some hindsight perspective and read.
As you probably are already aware, the House of Representatives has passed the debt ceiling and the House was the more troublesome of the two branches of Congress. The market is rather flat on the news.
As you know, 3C has been responding favorably and I do believe that a rally will follow this week. I won't discuss the debt ceiling because I think it's a farce. Our economy is in such poor shape that I feel we are headed for a totally different and new trading environment-that of the secular bear market.
As you can see, the SPY and most of the major averages are sitting on the 200-day moving average. There's a lot of volume there and if we consider Wall Street game theory, the intraday plunges below the 200-day moving average triggered a lot of stops, making it possible for Wall Street to accumulate a lot of shares by simply taking the other side of the trade.
As for the 15 min divergences...
In the past, we have seen some double 15 min divergences lift the market a fair bit, none pictured here had the same leading positive status that we have now, it's hard to imagine this divergence failing and I remain biased to the long side for a bounce, however, I'll be looking very serious at any potential bounce for a place to establish a large short position. I do believe the next leg down will be something like the second shoe to drop and will be very serious, ultimately, I believe that is why the dollar has been accumulating and on the next leg down, I expect to see the dollar rally strongly.
These are very strong signals, but as I always tell you and as you know, price is always the final judge in the market, thus I have maintained responsible risk management on my positions and if this market were to fall tomorrow and never look back, my portfolio which is long biased, would not suffer any serious damage.
So we must keep all options and scenarios open and plan for them now, not in the heat of the moment.
From what I see in 3C, a rally from here I believe would be exceptionally strong, I think it could easily post new highs, but it's essential that you understand this in advance and not get caught up in the emotion of the moment. Hopefully we'll have a nice ride up and then have excellent positioning for a superb ride down.
I encourage you to keep track or a watchlist of short candidates and more then anything, to make sure your risk management plans are in place and you follow them to the "T" :)
As for the Miners Trading System, it remains Long DUST. Both systems essentially (system 2 was right at the crossover point) we're long buys on the open of the 28th @ $39.20, giving you a stop loss of $38.02 and a 2.3% gain thus far.
One last thing to keep in mind, Tropical Storm Emily could potentially threaten production of Crude in the Gulf of Mexico, we'll want to keep an eye on USO (there are some initial positive signs) and you may want to consider some individual names with drilling operations in the gulf.
I'll be updating as events warrant.
In any case, I ran the scan on the S&P-100 for a year to date. I wasn't trying to create a trading system so I didn't work to optimize the exit strategy, the third 9-period bar just had to produce a gain.
Here are the results
More or less, this is a type of oversold system, I was just interested in seeing what the statistics would look like. As you can see, 82% of the time the 3rd 9-day period would produce a gain. This isn't part of my analysis, just an interesting aside that may have some potential as a trading system in the future.
As for tonight's Price/Volume Relationship, there was no DOMINANT relationship, except in the the Dow-30 and NASDAQ 100, which were both Price Down/Volume Down. You may remember of the 4 relationships, this is the most ambiguous, and the most common relationship seen in a bear market. Looking at the relationship in context of the current environment, it simply tells us that selling wasn't as urgent today in the two averages with the dominant P/V relationship.
As I showed you today, many of the indices saw divergences move to the 30 and even 60 min charts, this is a bit rare and signals underlying strength.
As for today, I mentioned the game will still be played and Wall Street does NOT want the longs lining up on one side of the ship before a move commences, they need someone to offload their positions to and if everyone has jumped in long as it seemed this morning, it's harder to create that demand. To beat Wall Street you need to think like Wall Street. Unfortunately we are decent people and the evil, "stop at nothing to destroy anyone and everyone" mentality does not come naturally to us. This s why I encourage you to keep a trade journal or a market journal and go back after a month has passed and you have some hindsight perspective and read.
As you probably are already aware, the House of Representatives has passed the debt ceiling and the House was the more troublesome of the two branches of Congress. The market is rather flat on the news.
As you know, 3C has been responding favorably and I do believe that a rally will follow this week. I won't discuss the debt ceiling because I think it's a farce. Our economy is in such poor shape that I feel we are headed for a totally different and new trading environment-that of the secular bear market.
As for the 15 min divergences...
These are very strong signals, but as I always tell you and as you know, price is always the final judge in the market, thus I have maintained responsible risk management on my positions and if this market were to fall tomorrow and never look back, my portfolio which is long biased, would not suffer any serious damage.
So we must keep all options and scenarios open and plan for them now, not in the heat of the moment.
From what I see in 3C, a rally from here I believe would be exceptionally strong, I think it could easily post new highs, but it's essential that you understand this in advance and not get caught up in the emotion of the moment. Hopefully we'll have a nice ride up and then have excellent positioning for a superb ride down.
I encourage you to keep track or a watchlist of short candidates and more then anything, to make sure your risk management plans are in place and you follow them to the "T" :)
As for the Miners Trading System, it remains Long DUST. Both systems essentially (system 2 was right at the crossover point) we're long buys on the open of the 28th @ $39.20, giving you a stop loss of $38.02 and a 2.3% gain thus far.
One last thing to keep in mind, Tropical Storm Emily could potentially threaten production of Crude in the Gulf of Mexico, we'll want to keep an eye on USO (there are some initial positive signs) and you may want to consider some individual names with drilling operations in the gulf.
I'll be updating as events warrant.
Market Update
It looks like a consolidation or a pullback in to the close at this point.
1 min negative divergence suggesting a consolidation/pullback
The next timeframe, 5 mins looks very strong in a straight line leading divergence since 12 p.m.
