I'll check around after this post,
Now to see what's causing volatility, it may just be price relative to Friday's price.
6 years ago
Wednesday, September 19, 2012
Market Update
I'm not sure what's causing the volatility or if it's just normal volatility, I have to take a look at the news and a few leading indicators, in any case, there's quite a bit of volatility as the market retraces a bit, although it is a little early for a full on move higher without the danger of becoming overbought on an intraday basis.
I'll check around after this post,
DIA all the way out to 3 min is leading negative, this after the DIA/Large Caps seem to have had some initial bullish bias (relative to the other averages) in underlying activity.
The 5 min chart really isn't impressive at all, in fact this is the strongest it has been and that isn't saying a lot. Note the DOW is closer than most averages to its Friday highs.
ES has a leading negative divergence, it's actually much worse right now, below the price lows of the day.
The IWM which should lead a new push higher showing a 3 min positive divergence that has gone negative recently.
IWM 5 min looks much worse than the DIA
NASDAQ futures had the start of a leading negative divergence, it too has grown, but nowhere near as bad as ES.
QQQ 3 min has gone deeply leading negative intraday here, note QQQ is just above Friday's highs.
SPY is about half way to Friday's highs
Interestingly the 3 min negative divergence isn't as bad as others that are at Friday's highs.
The 5 min chart still is in line on the SPY.
Here's the extent really of the SPY negative divergence.
Now to see what's causing volatility, it may just be price relative to Friday's price.
I'll check around after this post,
Now to see what's causing volatility, it may just be price relative to Friday's price.
Gold Futures, GLD and GLL
I've been trying to decide what to do with an equity long position, GLL (Ultrashort Gold), it's currently down -12.43% on the position and -0.9% of portfolio, so risk wise it' still way below the 2% target, but If there's no reason to hold the ETF, why wait for -2% to be hit?
Gold/GLD are curious, they did run pre-F_O_M_C quite a bit, they did run on QE3, but they haven't done much since then, which leaves gold in a flat range mostly between $170.50 and $172 (GLD). These flat ranges always seem as if there's nothing happening, but more often than not, these are exactly the areas where underlying movement from Wall Street is in play; ether it would turn in to a bullish event for gold or this is just a longer version of the "Quiet market is a dangerous market".
So looking at both the Gold (mini-YG) future and GLD, I decided to hold GLL at least for now. Gold should have shown follow through on Friday, at least gold if not the entire market, it didn't. Longer term I'm not making any judgements about GLD and I'd rather stick with shorter term trades right now like GLL. As I said yesterday, not all negative price action is negative and not all bullish price action is bullish. For example, if QE-3 is not priced in to the market or not adequately priced in, then it makes sense smart money would want to add to GLD/gold, almost always they do that during price declines or at flat areas after a decline. So it remains to be seen what would happen f gold did fall, whether it would show something that goes against all conventional wisdom. For now, I have decided to leave GLL in place.
1 min Gold Futures were negative at the overnight highs and are leading negative right now.
The 1 min GLD chart (even though it' a totally different asset (an ETF vs a Futures contract) and even though the code for 3C varies a little between what is used on futures and what is used on stocks, ETFs, etc, GLD 1 min is giving the same signal.
In fact the futures timeframes tend to be stronger so the equivalent timeframe for a futures 1 min chart may be more like a 2 min chart on stocks, the GLD 2 min chart clearly shows a similar leading negative divergence at the exact same time (11 a.m.-12 p.m.)
Gold Futures 5 min is also leading negative and was negative overnight at the high.
The GLD 10 min chart is about the same, it is leading negative as well.
Gold 15 min shows a negative divergence on Friday after the QE-3 announcement and Gold held flat and then dipped, there was a small positive divergence lifting gold off the lows and in to another negative divergence at the overnight highs.
The GLD 10 min chart during the same time period (after QE3) shows the same initial leading negative, a small positive that lift off the lows and another negative in to the intraday highs.
The white box on date shows post QE-3 activity, again the same negative divergence right after the move up, as if profits were taken, the same positive at the gold futures lows and the same leading negative which is even worse right now.
GLD 60 min, even ignoring the trend here, GLD's action has been almost exactly alike.
Again ignoring pre-F_O_M_C, the 4 hour chart has deteriorated.
As has the hourly gold futures chart, which had a positive divergence in to the F_O_M_C announcement and a clear negative since, for these reasons, because I see no hint of sustained accumulation, I'll keep GLL open and see how Gold/DLG reacts on a potential move down.
Gold/GLD are curious, they did run pre-F_O_M_C quite a bit, they did run on QE3, but they haven't done much since then, which leaves gold in a flat range mostly between $170.50 and $172 (GLD). These flat ranges always seem as if there's nothing happening, but more often than not, these are exactly the areas where underlying movement from Wall Street is in play; ether it would turn in to a bullish event for gold or this is just a longer version of the "Quiet market is a dangerous market".
So looking at both the Gold (mini-YG) future and GLD, I decided to hold GLL at least for now. Gold should have shown follow through on Friday, at least gold if not the entire market, it didn't. Longer term I'm not making any judgements about GLD and I'd rather stick with shorter term trades right now like GLL. As I said yesterday, not all negative price action is negative and not all bullish price action is bullish. For example, if QE-3 is not priced in to the market or not adequately priced in, then it makes sense smart money would want to add to GLD/gold, almost always they do that during price declines or at flat areas after a decline. So it remains to be seen what would happen f gold did fall, whether it would show something that goes against all conventional wisdom. For now, I have decided to leave GLL in place.
In fact the futures timeframes tend to be stronger so the equivalent timeframe for a futures 1 min chart may be more like a 2 min chart on stocks, the GLD 2 min chart clearly shows a similar leading negative divergence at the exact same time (11 a.m.-12 p.m.)
AAPL Update
The positive divergence from AAPL last week before the I-phone 5 release wasn't all that big, it was big enough for a swing move, but surprisingly it wasn't much bigger.
The same 5 min chart that gave the positive signal has been languishing as it has since turned negative. I'm seeing AAPL diverge from the S&P in terms of relative performance this morning, but even more surprising given its weight, it's diverging just as much from the NASDAQ 100. I'm especially interested to see what happens below $700 and $699.50.
Actually as I am writing, AAPL just broke under $700.
As was the standard Monday, I'd still like to see this 5 min hart break to a new leading negative low.
AAPL (green) vs the QQQ
AAPL vs the SPY
The trend line was around the $700 area, that is now broken with a slight uptick in volume, the stops are going to be around $699.50 and I'd like to see what happens when those stops are hit.
The same 5 min chart that gave the positive signal has been languishing as it has since turned negative. I'm seeing AAPL diverge from the S&P in terms of relative performance this morning, but even more surprising given its weight, it's diverging just as much from the NASDAQ 100. I'm especially interested to see what happens below $700 and $699.50.
Actually as I am writing, AAPL just broke under $700.
Quick Market Update
As of yesterday the chart consensus view was a short term move up was in the works, however the divergence wasn't very large and still quite negative on intermediate-long term charts suggesting the move wouldn't be the start of the new primary uptrend of QE3, but more like a counter trend bounce so far.
Most of the averages this morning are at least in line (confirmation) with the short term positive divergences they built largely yesterday. A couple are showing a little more enthusiasm now.
DIA 3 min leading
ES 1 min leading
NQ 1 min leading
SPY 3 min leading.
Actually since I captured the charts, the NASDAQ / S&P futures have about doubled the size of the leading divergence seen above.
Most of the averages this morning are at least in line (confirmation) with the short term positive divergences they built largely yesterday. A couple are showing a little more enthusiasm now.
SPY 3 min leading.
Actually since I captured the charts, the NASDAQ / S&P futures have about doubled the size of the leading divergence seen above.
PCLN Follow Up
Yesterday morning I took a look at some Tech Core Equity short positions and decided to cover BIDU
That can also be seen on the 3 min chart.
EIA Crude Inventories
As usual, Wednesday, 10:30 the EIA petroleum report comes out. This week we had a build over the prior week, hmmm... I wonder why?
From 2 mm barrels to 8.5 mm barrels this week. What changed since last week in the world? More specifically, the Middle East?
USO's initial reaction...
Crude Futures are putting in their first positive divergence since this morning's clear negative divergence sending Crude lower with a higher $USD.
| Released On 9/19/2012 10:30:00 AM For wk9/14, 2012 | ||||||||||||
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USO's initial reaction...
USO breaks intraday support, volume surges and then back above it.
Unreal
With all that's going on with the Muslim world enraged over a YouTube clip, you'd think the editor of this French magazine would be a bit brighter.
From Reuters...
From Reuters...
The French government, which had urged the magazine not to print the images, said it was temporarily shutting down premises including embassies and schools in 20 countries on Friday, when protests sometimes break out after Muslim prayers.
Riot police were deployed to protect the Paris offices of satirical weekly Charlie Hebdo after it hit the news stands with a cover showing an Orthodox Jew pushing the turbaned figure of Mohammad in a wheelchair.
On the inside pages, several caricatures of the Prophet showed him naked. One, entitled "Mohammad: a star is born", depicted a bearded figure crouching over to display his buttocks and genitals.
Resurgence in Risk Appetite
Like clockwork, the US open as the European open, changes everything and the EUR/USD which was breaking to a new lower low found some support around $1.30 and all is back on track virtually were we left it yesterday.
A small intraday bull flag forms in the SPY...
The 1 min SPY chart
The 3 min ....
And the 5 min... Pretty much were we left off yesterday, it's amazing how ETF divergences from the day before almost never skip a beat no matter what happened overnight-we saw it in oil yesterday as the run up was brought back down to the exact level USO had been at the day before as it underwent additional accumulation, which was all predicted the day before.
XLE/Energy/ERX
Since the long in ERX for a quick (maybe swing) trade, here's what energy looks like on the open this morning after taking out some stops.
XLE hitting stops this a.m. from intraday support yesterday.
XLE 1 min positive on the open today.
Even 5 min positive as XLE turns up after hitting stops.
The 15 min chart, still very much negative and the reason I warned a long ERX/Energy position should be undertaken only if you have the time to watch the market and are nimble enough to move quickly.
ERX
Mostly the same stop breaking action this morning.
positive on the short term charts like 2 min above
as well as 5 min
Again, at 15 min there's the cap on the divergence suggesting a bounce, but not a large leg up.
ERX
Mostly the same stop breaking action this morning.
