Market Update

So far things are moving in the direction we anticipated, the divergences are building even though we were threw a few curve balls like yesterday's ramp taking us out of a range and in to an area where we wouldn't be able to build positive divergences before a move higher and then today with the price drop, but as I proved to you recently and many long term members have seen over and over, not every decline in price is bearish, 3C often is the only tool that can tell us whether the decline is bearish or healthy/productive.

Very short term there are some indications of an intraday pullback so that may be of some use tactically in entries, etc.

Here's the update, after this I'm checking leading indicators.

After seeing intraday signals for a negative divergence or pullback as mentioned above, I checked ES as well and it confirms.

A mall relative negative ES divergence within a much larger leading positive divergence, as mentioned above, this is something I'd view as a tactical advantage, being able to enter positions at a better price than these levels with less risk.

DIA

 1 min leading positive.

 The same chart zoomed in to intraday shows the intraday negative divergence I mentioned.


 DIA 5 min leading positive, no sign of any intraday negative divergence whatsoever so as of the signal now, it's simply intraday and not much stronger than that.

 10 min leading positive to new highs above last week's top and 3C readings. As mentioned, I do expect that we will see a bigger shakeout move to the upside so this larger positive divergence makes sense.

QQQ

 1 min leading positive and most of that is today

 same chart zoomed in to intraday shows the positives and the intraday negatives.

 2 min leading positive, again the most progress in 3C is on today's move lower. This appears to be where smart money is adding to their positions and this is where I want to add as I have.

 3 min leading positive, again, much of the leading from today.

 10 min leading positive with a new leg higher in 3C today alone.

 QQQ 15 min leading positive divergence so the divergences is migrating, even on a day like today.

 QQQ 30 min leading positive divergence forming, this is quite a feat.

 SPY 1 min was working well as an intraday trade signal indicator, now it is leading positive, some from yesterday, but most from today.

 2 min negative from last week as was clear and a leading positive now.

 5 min leading positive, also much of that leading, at least to new highs, from today.

10 min leading positive.

Oil/Energy/ Adding to ERX.

I'm still not convinced on USO even though it is way oversold right now and there are positive divergences between 1-10 min charts in some for or another. Perhaps the F_O_M_C has some positive effect on USO, but for me it's still not enough to take a position based on the charts and I certainly can't divine what the F_O_M_C policy statement will be and how oil will react to it.

My core short in IOC has been acting as a nice hedge to the long positions and is now the #1 performing core short at +15% with no leverage.

As for Energy and ERX in particular since that was a long position started, I will add to ERX here. As you know I consider Energy, Tech and Financials do be indispensable to any upside move that has any staying power beyond a day or two and with the increased rotation, I feel I need to have that representation by Energy, not necessarily oil/USO, but Energy more broadly. The IOC short will be left in place as a hedge and hopefully it moves down with Energy / XLE/ ERX moving up.

 This channel buster in ERX/Energy also formed a bearish descending triangle with a head fake breakout that failed-From failed moves come fast moves in the opposite direction and ERX broke through the bottom of the pattern as Technical traders would expect, this morning's break below serves as confirmation for retail traders to go short and they did in a big way as the volume on this break is bigger than anything I can see on my chart's history going back to July 20th! That's also perfect as it creates large supply that can be accumulated on the cheap, easily and without anyone suspecting anything as someone always has to take the other side of the trade.

 ERX 2 min with some interesting leading divergences

 The 3 min positive



And my favorite, the 5 min positive leading divergence.

For me, this is worth adding to ERX.

Tick Update

While there are a lot of things to look at and I have many more to go, I'm happy to see the TICK chart looking the way it does considering I was using today's weakness to add to positions which was the entire point of only entering half of the intended position size last Friday afternoon. The TQQQ add in particular was a good move I feel as the QQQ is the best performing today by far, only down -.30 vs the SPY or DIA down -1.6.

Any way, the point was the TICK chart

Since the drop this morning we have seen a nice moderation early on as I pointed out and now we are in positive territory between +500 and +1000

ES Futures Update

ES continues to fly in a leading positive divergence

 Yesterday's after market Moody's Spanish Regions downgrade, the European open at the green arrow


The European and US opens at the green arrows, a large positive divergence in ES that is leading to the upside in a big way.

I have a lot more to look at, but as you can see, I'm using these lower prices to add to the leveraged long positions that I feel are a decent tool for a shakeout move up, if I feel it will be something stronger I would probably cut back on short positions, but as they are now they are working well and have a nice hedge in place that actually works and makes money on days when a hedge should do nothing more than hedge. I'd also enter longer term positions and move out of the ETFs if I felt we may be looking at a longer term move to the upside.

AAPL Update

 AAPL made it through the first test yesterday, resistance from the October 9th hammer, the next move I'm looking for is above the neckline around the $650 area.

 AAPL intraday breaking through first resistance and holding support there.

 AAPL 30 min with a relative positive divergence

 AAPL 10 min with a relative positive and now leading positive divergence

 AAPL 5 min leading positive

 3 min also leading positive

 Intraday the 2 min from a relative to the start of a leading positive divergence.

The 1 min is the same except more fully developed which makes sense as the shorter timeframes bleed in to the longer ones.

Went with AAPL Nov. $625 Calls

Again this is for a shorter term trade like the last one.

Going to Add to FAS, TNA and AAPL

I'm going to fill out the FAS and TNA positions. I feel it' a little early for FAS, but I'm going to go ahead with it (it's still speculative).

AAPL I'm going to add Calls again, November and in the money, not sure which strike yet.

AAPL update coming.

FB Update-Earnings Today

FB is reporting earnings today after the close, I will keep a close eye on it to see if there is what looks to be an earnings leak. Beyond that, I'm still focussed on FB as a longer term trade putting together a longer term base, earnings aren't of much interest to me because unless I see an earnings leak and we have seen a lot of those, earnings are a wildcard and it's the guidance that really matters and that often isn't discounted immediately, at least not like the headline report, usually guidance is discounted in the days ahead. One quarter about a year ago I wanted to show members that leaks are very real. I searched just about every company that was reporting, I wasn't looking for miss or beat, the charts can't tell you that; I was looking for the reaction after earnings based on unusual trade before earnings, we hit 19 of 22 correctly if I recall and GOOG we hit correctly except the GOOG signal didn't come until 15 minutes before the close and their report! So there are leaks out there, not everywhere, but when they show up, they are hard to ignore.

FB has had some unusual trade recently, I'm not sure I would call it proof of a leak, but if there were other evidence showing up today it would add credibility.

 All the way back at the start of August, we saw a quick trade to the upside, but I said it would be short because FB was looking like it was going to build a large base (thus the upside trade couldn't go too far as a base would have to be formed), since then, that appears to be exactly what has happened. I'm not sure what I would call this price pattern and I don't think it matters, it's a wide range, but a range nonetheless.

 FB acted well this morning vs the market, up at one point about +1.5% in early trade on volume.

 Here's the recent rounding area where the market is expected to make more of a range. If you look at the FB range above and divide it up in to 5 sections and look at any one of those sections by itself, it's impossible to see the range or the bigger picture, that's something important to remember now (not that I would imply that a market range will be anywhere near this large).

 1 min intraday FB was positive yesterday and early this a.m. on the gap down, it just put in a relative negative divergence that should pull it back.

 This 2 min chart shows some unusual behavior with a very large leading positive in the area, however it's not that far off from the same seen in the market so it's hard to call that a sign of an earnings leak.

 The 15 min chart overall looks excellent, especially since October.

 Here's a closer look at the 15 min chart.

This is another unusual chart that is not seen in the market, a 30 min leading positive divergence, most market averages are around 10-15 min positives, but not leading like this and none are at 30 minutes, this is the closest thing I can see on the chart to unusual trade or a possible upside earnings leak.

I'll keep watching for additional developments.

Market Update

I am considering adding to the TNA position started Friday, I'd like to look at other assets more closely and see which looks the best here before making that decision, but there's improvement in the IWM that was seemingly out of rotation yesterday as large caps were slightly favored.

As for the market update, the SPY, IWM and ES 1 min charts are acting well as intraday indicators so I'm looking at those.

 The overall ES 1 min positive divergence that started around 5 a.m. this morning, after the 3 a.m. European open that saw additional downside, but much of the downside had already been in place as ES went negative yesterday in after hours as the Moody's news was released on the 5 Spanish Regions. Again, I can't say anyone knew about Moody's specifically, but it was well known that the Spanish Regions bailout fund was tapped with less than 5% of its capability left, therefore a downgrade of Spain or the regions would not have been a surprise, however as pointed out to another member, yesterday's Market Watch F_O_M_C article that sent the market surging higher toward the close is not part of a controlled range, it seems something was needed to act as a counter balance to the Market Watch news, in effect holding VWAP down and within a range that institutional money often demands orders be filled at. What is especially fishy in this while ordeal is that the bulk of the ES (S&P futures-which determine the SPX cash open) came during the extremely low volume overnight trade. If you're not following the implication, the market would be VERY easy to move in that low overnight volume market and have a more profound effect on the open as ES determines the SPX cash open, in essence halting and undoing some of the frothy end of day trade yesterday from the Market Watch article. Smart money or institutional money is not going to accumulate share chasing the market higher.

 ES close up since the 9:30 US open, also positive intraday.

 The IWM 1 min as of yesterday acting as a good intraday indicator as the 1 min chars often do, however...

 The progress in the IWM is still there as seen on this 5 min chart, it's just measured on longer term charts as the 1 min will often act as an intraday indicator.

 Here's the IWM 1 min zoomed in to the intraday signals that it has been giving, around 10:30 it looks like intraday the IWM saw accumulation of the lows, ES has the same signal at the same time.

 The SPY 1 min was acting as a decent intraday indicator, this is why I didn't use the 1 min SPY in opening indications because after the Market Watch article it transitioned from intraday to something else with an extreme move that was not characteristic for the way the SPY 1 min chart had been behaving.

Looking at the SPY 1 min zoomed in though, again as the intraday indicator it had been acting as, it also went positive intraday around the same 10:30 a.m. area and lading positive since, this played a part in my decision with regard to FXP timing in closing the position.

I'll be looking at which assets I like the best as far as the charts and will hopefully be able to add to them at lower prices here.

FXP sold

The position loss is less than 1%, the total portfolio loss is less that 1/10th of 1% on a pretty sizable position.