QQQ Update

There's a lot to watch here so I kind of feel like a 1-legged man in a butt kicking contest. Here's the Q's update.

 QQQ 1 min showing a negative divergence, remember, they needed some strength to sell in to.

 It has migrated to the 2 min chart as well, we are near some resistance, but I would start to consider maybe adding looking at starting some positions in some inverse ETFs, like SQQQ, although at this point I would not go huge, but I would consider starting to add. It remains to be seen how options expiration will effect everything.

 The 5 min is starting to see a negative divergence as well, it's not horrible, but we know they are selling in to strength.

The 15 min suggests we could see further upside, although the Q's have put in quite a gain for the day. Note resistance in the red area. If you start phasing in to short positions, make sure your risk management allows plenty of room to add should we move higher which right now feels like it is not probable, but that is feeling and we want to look at hard data. The 15 min chart suggests more upside.

On the Gmail Issue

It seems there is a confirmed disruption in gmail, although my account is now working again so for the time being I will be monitoring my BT46n2 gmail account as I can't stand Yahoo. If there's another interruption I'll post redirecting you to the Yahoo account.

USO Update

 The USO 1 min negative divergence looks like a pullback to fill in some of the gap created today, this is why I was pretty quick about taking profits this a.m.

 The 2 min chart is lagging as well rather than confirming also suggesting at least a pullback here.

 Yesterday's 5 min leading positive divergence got USO to gap nicely, there's a bit of a negative divergence close to the open and the rest of the chart is pretty much in line, the yellow area is a potential pullback zone, I'd certainly consider another USO long on a pullback with accumulation building in the short term charts.

 The 15 min chart looks like USO could certainly move toward the top of the channel I mentioned in yesterday's update, however there's a relative divergence today within the leading divergence (white box) that looks to me more like a pullback than anything else.

The choppiness in the EUR/USD is not helping USO's cause right now, you may want to keep an eye on the pair for a move higher in the EUR, which will be supportive of USO.

On a final note, while I have expected a pullback since this a.m., stocks can consolidate through price-pullback or through time, consolidation laterally, I suspect more of a price pullback here and if I see short term positive divergences in to that pullback, then I'll be looking to add a new call position.

PCLN Update

Yesterday I posted this update for PCLN

If you have questions about what is going on today with PCLN, yesterday's post should answer most of them as PCLN broke some important support, the volatility shakeout was expected to be in play today along with some short term 3C charts indicating that was the likely path today. The Tech rotation is probably also helping PCLN a bit, but yesterday's update is a good starting point for understanding the short and longer term picture in PCLN.

 This is yesterday's break of support and why I suspected a bounce move. Note the volume recently in PCLN, it looks like the hedgies have been trying to squeeze out the door all at once, the bounce is something I'm sure they'll appreciate and be selling in to ad this entire area looks like a head fake area.

 We have resistance coming up in the area in the red box, I would suspect PCLN will try to move somewhere in the white box area.

 Here's the positive 5 min divergence from yesterday and thus far it's pretty healthy looking today.

 The 1 min chart shows a little negative divergence, most likely associated with a consolidation below the resistance area PCLN is at right now. I would suspect we will see a stronger negative divergence after PCLN moves through resistance. Remember they need strength to sell in to, if they start selling in to resistance now, they likely kill the move.

 The 1 day Trend Channel has held the move since PCLN started to get very volatile.

Yesterday technically would be considered the break of the uptrend as PCLN crossed below the Trend Channel, however that is a longer term view, think of it like this, an animal is most dangerous when it is wounded, so volatility in this area should be expected. The Trend Channel is starting to turn down, this is not good for PCLN's longer term outlook as it is the first time this year. The Trend Channel has a stop on a daily close at the $750 area, although with increasing volatility a wider channel may be more appropriate. PCLN ultimately will be at the mercy of the market and Tech, so once the bounce starts to fail, PCLN will have a lot harder time making additional gains and will likely set up a very nice short position.

The 2 day Trend Channel's stop on the upside is at the $755 area.

We'll keep an eye on PCLN, again for the longer term view, see yesterday's update linked above.

Yep, GMAIL appears to be down-here's another email

Ok, I set up another email for you to reach me, if you have sent an email in the last hour or so and it is urgent, please re-send it to Brandt530@Yahoo.com until the Gmail problem is resolved. If anyone else is having gmail issues, please let me know or if you have a link to the interruption or any knowledge of the interruption/fixes, etc, please let me know.

Thanks.

Anyone else having trouble with Gmail?

Risk Assets Update

Here's where we stand, on the 10th at the white arrow, the break of both SPX support and the 50-day ma told us that we should be looking for a volatility shakeout, this would take out the newly arrived shorts, later in the day we saw the 3C evidence for just such a bounce, which is hard to pull off with the macro market climate becoming more hostile, but the market has volatility on its side. I said back then there isn't much point in running such a move unless it can break back above the resistance level the SPX is at RIGHT NOW. These volatility shakeouts like what we saw in XOM are the trend, we stick with the trend until it ends, so the assumption we are still working from is that the SPX should move above resistance (which is exactly where we are).

CONTEXT for ES is supportive right now of higher ES prices as the model is higher than ES itself, this model is proprietary, but includes Credit, rates, currencies, etc, all of the same things we look at in the risk layout. A nice clean signal (although with volatility and market choppiness like yesterday with the averages all over the place, I suspect this will be one of the more difficult calls) is what we want to see with the model moving below ES.

 Intraday, commodity momentum "seems" to be in line with the SPX (green).

 A longer term view shows commodities are lagging, I don't regret closing the USO position, I'm still upset about the USO calls not being filled yesterday, but that's part of the market. I still take this as implicit signs of weakness from China. FXP is probably worth a closer look again.

 Since the April 10th bounce call, commodities through all the volatility aren't any better off then they were on the 10th with regard to momentum and in real returns.

 I added the Euro in blue to the mix, commods are lagging the Euro, the SPX is a leading the Euro. As I mentioned yesterday, once Wall Street puts a cycle in to motion they rarely fail, they put too much money and have too many plans for the cycle to let it fail and we have seen them step in several times to support this bounce which is just further confirmation that market head winds are really pushing against the bounce.

 High Yield Credit had been pretty much in line with the SPX and at times leading it, today it is lagging, this is the kind of divergence we want to see moving toward the end of a bounce, the Credit markets are much more in sync with reality than equities are, but just look at that SPX momentum today, purely manufactured by Wall Street.

 Yields are another leading indicator that have been supportive or in sync with the bounce, now they are starting to divergence, again this is what we want to see to better judge timing and tactical entries of short positions. I suspect this may end up being a much deeper divergence than previous reversals for the reason of the volatility shakeout.

 The $AUD is a great leading indicator as currencies go, it is moving up, but doesn't have the same momentum as the SPX, we will see shortly if this becomes a negative divergence.

 Intraday the $AUD momentum looks pretty good so I'm not ready to call a top here, I want to see the $AUD moving the opposite of the SPX.

 I'm using the Euro to look at what the $USD is doing as the $USD's inverse relationship is more difficult for most members to see divergences. As mentioned yesterday, the Euro was supportive of the market, meaning the $USD was a bit weak, supportive of the market. However we do see a lag today as the Euro seems to be a bit range bound, the noon time trend of $USD weakness has been a fairly consistent theme so we will see if the Euro catches up shortly.

 HY Corp. Credit remains in a shakeout move, it is exceptionally cheap compared to the SPX and a reasonable choice for a risk on move, it appears to be supportive of further gains in the SPX/market, we want to see Credit turn and run the other direction as far as timing goes, although as I mentioned earlier, I'm already building some positions starting with XOM earlier today.

 Credit intraday broadly in sync with the SPX.

 Energy rotated in early today, I sold USO calls and now the momentum has started falling off.

 Here is the rotation I've been expecting, Financial momentum is falling off as expected.

 Here is tech's momentum, this is the rotation from financials to tech I've been looking for, as mentioned yesterday it wasn't likely to happen without AAPL so the AAPL positive divergence along with Tech and the Q's all gave a good signal confirming a gut feeling.

Here is today's sector rotation with yesterday afternoon's , clearly financials are falling off, defensive sectors like Utilities, Healthcare and Staples are falling off as they should with the SPX moving, Energy came in to rotation on the consolidation below resistance yesterday that broke out today. Tech is the notable sector coming in to rotation and I believe it will be the last sector to rotate before the bounce ends.

Bottom line, this is definitely the trickiest bounce of the last 3, but it appears we have more to go before we can call it a day.

AAPL taking on resistance

 AAPL 60 min chart taking on resistance at the Broadening top's former support level which has been broken and the $600 centennial mark.

 The 5 min chart looks pretty good here for AAPL's bounce, it is leading positive on today's action thus far, still the resistance area should be sticky, especially as the $USD strengthens a bit.

 The 2 min chart shows a little negative action, this is to be expected at resistance as most traders are looking for resistance to hold, not understanding why there are volatility shakeouts and applying the old rules of T.A.

This 15 min chart is still key, it appears to have enough gas in the tank to blow through resistance, but I wouldn't be surprised to see some consolidation. A move above $600 should get the AAPL longs thinking.

XOM Update

I was looking for $84.50 in XOM to start a position there, we have made it to that level.

 Here's the often seen volatility bounce from a break below a top, although this appears to be only part of a much larger top. I want to start building a short position in this area and XOM will cover energy and large caps. I'm not quite sure how I'll approach this, I'm inclined to use stock rather than options, but may look for some long dated options if they are cheap enough to add a little kick. At this point I don't mind sitting through a little draw down, I just want to get the main position started.

 XOM's 15 min chart was never positively divergent, so I'm not expecting a whole lot more from XOM itself although it should float with the market a bit.

 XOM is in the area of the 5 min leading positive divergence, there's no sign of a negative divergence here yet, but..

 The 1 and 2 min charts above and below have been showing a negative divergence as XOM has climbed higher.

I'll probably not add to big of a position here, but I want to get something started.

USO Follow Up

 Here's the USO Calls I just closed out at nearly a 15% profit, I tried to add 50 yesterday which would have been a very nice profit, well above 15%, but as you know they didn't get filled.

 USO broke support yesterday, that's where I tried to add 50 more contracts to the 25 I already had. I said yesterday I thought USO would consolidate just below resistance before blowing through it, that is exactly what it did.

 late yesterday USO accumulated for today's move.

 Price is in the area of the 5 min leading positive divergence, this isn't why I decided to close them though, they were much higher priced than the calls I should have picked up yesterday.

Plus the Dollar is gaining some early morning strength as has been the recent trend, usually this fades off after the European close, so I'll take another look at USO around noon time to see if it looks worth another shot with more calls.