Some Support Levels

However, most if not all were broken before I could finish capturing them. I always look for volatility around support levels on an intraday basis.

 DIA

 QQQ

SPY

SMH

I received an emal about unusual strength in SMH, pretty much before I could respond, it headed lower.

 Tech in white is the strongest relative strength sector today, SMH is semi-conductors.

 There was a 1 min positive off the open, as it headed higher you can see 3C went negative and it has started to reverse.

The longer term 10 min chart is in a leading negative position.

Remember these words, "Bull Trap"

From yesterday,


"Maybe setting up a nice bull trap?"

 You hear me throw around the words, "Head Fake", "False Breakout" and occasionally "Bull or Bear Trap". There are so prevalent that sometimes we don't see them or understand the importance of what we are seeing. With the 3C charts so negative, t gives subtle price action new meaning. With this triangle in place, what would need to happen to get bulls to buy, to inspire confidence? A break above the triangle. While it may seem like random price movement, with 3C being negative through the entire event, it was clearly a set up, a head fake or a bull trap.

Everyone who went long the last two days the market is now at a loss=Bull trap. There's a reason for this, first the buying demand allows Wall Street to short in to strength and more importantly, in to demand. Remember how quickly long charts like the 10-15 min charts went leading negative-IN ONE DAY! That indicates the buying was being used by Wall Street to distribute and get short. The second reason, if you want the market to fall to make your short position worth more, there's nothing like adding supply to the market and those who are at a loss, will start selling and add supply, pushing prices down even more. This is the way of Wall Street.

More Bad News Then You Can Shake A Stick At

And today is not even an economic day of any real importance here in the US with only Wholesale Trade at 10:00 a.m.

I'm no economist and luckily I don't have to be. As I've been saying the last 2 days, the 3C charts are in such bad shape, there's almost no chance that this market doesn't fall.

While 15 minutes of alerts went off this morning, I took a look around at some of the news and as usual, Europe ALWAYS makes its rounds back into the spotlight of disaster within a few days. 3C has been warning us of this and probably much more that hasn't come to light yet.

Here's a quick round up of some of the disasters going on across the Lake Atlantic in Europe.

First, the ECB's interest rate decision this week didn't help and the Euro has paid for it, trading below the psychologically important $1.40 level.

The German Constitutional Court seems to have thrown a wet blanket on the spark of Euro Bonds.

Maybe most importantly, it's DoD day in Greece-Do or Die. Today is final day for greek bond Today s the last day for Greek bond holder to swap out for the debt that is supposed to be Greek bailout 2.0.

Greece has said t wanted a 90% conversion, but most think that was a bluff and somewhere around 70-75% would work. The problem? It is not happening!

Per Reuters, "investors in Greek government debt worldwide will tell regulators on Friday whether and how they will participate in a bond swap aimed at giving Athens more time to emerge from a debt crisis, with officials expecting a take-up of about 70 percent. Greece had threatened to cancel the deal unless it got 90 percent participation, which would see 135 billion euros ($189 billion) of its outstanding bonds maturing by 2020 swapped or rolled over in a global transaction it wants to conclude next month. Even with a participation rate of 70 percent or better, which is my current view, the PSI will proceed," said an Athens-based banker close to the procedures. German investors share that view, a big German bondholder told Reuters. A 75 percent takeup rate would be a success and enough to convince the political side of the deal , 90 percent was unrealistic from the beginning, he said. The threat to walk away may merely be a tactic by Athens to get most of bondholders on board, bankers said.

For more on this story, here's the link to Reuters.

Some say the Credit markets drive the Stock market, some say that wasn't the case during the Lehman Crisis. Many believe the same is true of Greece and Europe more broadly. Remember, one of my possible downside targets has been a new low.

The way the credit markets are working right now, the bond market is expecting a default or massive write-offs for Greek debt. Thus the Stock Market may very well be lagging in discounting this, although 3C underlying action has suggested Wall Street is taking it seriously, but seriously enough?

A Reuters journalist is circulating an email that has ramifications that are HUGE and IMMEDIATE.

"From colleague: trader friend just hit me with the following: There is “Chatter” in the market of a Greek Default this Weekend"

This is the reason European financials acted so badly last night.

Luckily, I don't have to be an economist, the charts have been warning for several days as you have seen.

Email List Reminder

The new email system is up and running with no problems. Many of you have sent the email address you would like to receive the updates at, but still many more I haven't heard from yet.

Just send me an email with your site email address log on and if you want the emails to go to a different account, that email account as well.

Thanks again.

Obama Speech?

The question the markets may answer Friday was whether Obama's speech before a joint session of Congress amounted to anything more then Bernanke jawboning?

Ambitious? Perhaps

Realistic? Doubtful

My take away from this semi-primetime speech was, "Really?"

Th speech and the proposals didn't strike me as something that was realistic enough or big enough to warrant a semi-prmetime joint session of Congress.

I personally don't think it will change much at all as far as the market is concerned, especially given the lack of details, which we'll have to wait a week or more to hear about. Perhaps the speech would have been better when they figured out the hows and ifs.

Furthermore as I noted Wednesday night, the proposal was DOA with Republicans before it even hit the "A" part, "arrival". Which leads me to wonder if this was more political, campaign posturing then anything else or rather then anything REALLY SERIOUS.

Had there been a bi-partisan agreement and a plan with details to give the bones some meat, maybe it would have been a market moving event, as it stands, I just don't see it.

The Miners Trading system

The signal is the same, long DUST, however, the original signal was on the open of 9/6 @$29.72. As the system has been designed and tested, there is a 3% stop-loss built in, which would give you a closing stop of $28.83. Today DUST closed at $28.45 which is below our 3% stop-loss, which would mean that you would sell DUST on the open tomorrow morning, even though the actual signal is still long DUST.

GLD/Gold has been a safe haven trade when the market falls and we have been in what I believe to be a bottoming formation, which means it has been choppy trading.

 Here's tonight's continued long DUST signal...

 This is the SPY in green vs GLD in white. You can see it's been very difficult to hold any kind of swing or trending trade. There are a few moments when GLD and the market have moved together rather then the typical inverse correlation.

 As I have been saying though and this is a hint toward my market perspective, DUST has been building a solid base on a 60 min chart, wait until you compare it to NUGT/GDX. Since it seems DUST has a tendency toward an inverse relationship with GLD, the fact we are seeing such a long and apparently strong underlying condition in the base, hints to me that the market rise I've been anticipating (after we get a decent drop and I believe this month), is probably on track. The market rises, GLD falls and DUST with its largely inverse correlation rises.

 Even the 15 min chart of DUST shows strong 3C positive divergences in the underlying action.

 This is a 1 min chart of DUST with a late day positive divergence, so you may get a better price on the open and we may see a gap up that I hinted at with a few late day market divergences. I'll show you a Trend Channel chart of reversals at the end of this.

 In contrast, NUGT's 60 min chart is going the opposite direction with a 3C negative leading divergence.. Remember, these are longer term trends represented by the 60 min hart and we are still in a choppy market. Furthermore, last month I questioned whether the typical correlations we have grown use to seeing are going to change.

 Here's NUGT on a 15 min chart, again lagging in a negative divergence.

 As well as on the 10 min chart

And the end of day 1 min chart looks the exact opposite of DUST.

Now, this chart is more market related, but has to do with reversals which I often say, are a process, rarely an event.

Take a look at the SPY with my Trend Channel

This channel was designed to hold trending trades on a daily basis, but because the market has been so choppy, I have to set it to a shorter 30 min timeframe. When price crosses below the lower channel during an uptrend, it signals the end of the trend. However, as  say it's a process, note at the red arrows when price first crossed below the channel and in the white box, some extra time before the market reverses down. In each of these cases, the stop signal came and 1 day passed after the stop signal and then the market reversed down.

Perhaps we do get a gap up and lateral trade tomorrow after the President's speech tonight. One thing is for sure though, the 5, 10 and 15 min charts are in some of the worst shape they have been in since we started this consolidation so I'm holding my short positions gap or no gap up.

A New Feature

I have many members from all over the world and what is most important to me with Wolf on Wall Street is to help my members understand the market. I appreciate and care about every member and I want you to have the best information possible. For my members across the world, I have added a new function, GOOGLE Translate. It may not be perfect, but I hope it helps.

Just pick your language from the drop down menu and let Google do the rest.

The depth and scale of the market's problem

Remember that the longer the chart, the more important and 10 min is where we see a lot of institutional activity.

Not only did the 10 min DIA go negative at today's intraday highs-Wall Street selling in to strength-, look at the leading negative divergence created in just half a day, and then compare that with the same 3C levels in the past-YOU CAN'T, today the leading negative divergence is the deepest we can see on this chart, even when prices where lower on 9/6.

Notice Anything

 The Euro around 3:10 and 3:30

The SPY around 3:10 and 3:30