Look out Below

A largely down day on increased volume with the DOW closing on 8000. Look out below next week? Or do we just postpone the inevitable.
The Q's gapped slightly up this morning, tagged R1 on a gravestone doji-type candle and sold off all the way down to S1 before chopping around and finally finding support at S2. The bottoming candle was a hammer (two hammer's actually) while a re-test of the bottom was met with a bullish momentum divergence and a tweezer bottom candle pattern. Our target at this point is Vwap which we blew by until a hanging man led the way back down to S2 again.The SPY was a little more straightforward on the 15-min. chart to short the pullbacks to the 20-EMA in this short-term bear trend.I was watching UNG for follow-through as I mentioned in yesterday's post, and well it sorta got follow-through, just in the opposite direction, erasing all of the previous day's gains.

Nat Gas

Forgot to bring up UNG in my previous post. Watch for some follow-through tomorrow.

so much for a continued rally

Didn't take much for the bears to erase yesterday's rally, the Dollar perked up, Gold is on fire, and Oil can't catch a break. The Q's did put up a fight to stay above $29.50, and it closed just below a 38.2% retracement from our counter-trend rally in place over the past 7 sessions. The open gap this morning chopped around S1 (also VWAP) all morning before turning lower around noon. Support was found around $29.60 (previous resistance) where we saw a double bottom (coinciding with a bullish momentum divergence) which brought on a counter-trend rally back to VWAP (where a bearish momentum divergence took price back to test support, where we ended the day). On the 15-minute chart we got a 20- & 50- EMA crossover (ocurring at today's double-bottom) giving us a bearish orientation, and oppotunity to short price retracements to these MA's (as occured later this afternoon). Though we need to proceed with caution, as today's 38.2% retracement could be a double-bottom, bringing prices back up to test the $30. - $30.50 range. Now take a look at Gold, the U.S. Dollar index, and Oil:

fade the Fed trend

Quite a healthy trend today running up to the FOMC meeting. Early on after gapping up (above R1 & R2) on the Q's a base break set-up gave us a good long entry (pay no mind to the momentum indicator at this point) which ran us up to R3 where a lot of narrow-range chopping took place. After another push higher we were looking at our momentum indicator to see what would happen once the Fed minutes were released. This gave us a bearish momentum divergence, bringing price down to just below the daily 50-EMA, where we were able to close above.
{Correction} The chart below is labeled incorrectly, the solid green line is the daily 50-EMA, not the 20-EMA.
Using my cycle-stochastic indicator I got three entries (2 long 1 short). The 2 long entries were an opportunity to either add to, or hold the long position entered on the early morning base-break. The third entry was also a "holy grail" set-up; more encouragement to be long. The third signal was a result of the FOMC announcement that coincided with a bearish momentum divergence on this same indicator.Meanwhile, our QTICK barely pushed negative all day and the Advancing/Declining issues at their peaks were at a 2054:709 ratio (quite bullish).So, on our broader perspective, tomorrow can be quite telling. We broke out of our ascending triangle and came quite close to our target and closed pretty solid. Immediate resistance is in the $30.90 area.I'm curious about USO here. Basing around support ($27.73), got rejected from it's 10-EMA in a narrow range on ever larger volume. While our stochastic takes on a Head & Shoulders pattern with the neckline threatening a breach soon.

where will all the jobless go?

It's encouraging to know there's somewhere to turn.

no rally today

Q's once again bounced between Pivot support and R1. Early on we had a cup w. handle type of pattern (on 5-min.) that started breaking out (around 12:15p.m.) but couldn't get past the $29.60 level. Some big moves followed that R1 rejectionAfter we sold off below the 20EMA on our Daily chart price formed a bullish momentum divergence, which coincided with a tag of the 50-EMA on our 15-min chart, price then rallied for another shot at $29.60 (again denied). Finally, price closed just under the Daily 20-EMA.The NasdaqTICK spent most of the day in positive territory, while price tests and bases around $29.50.
An ascending triangle breakout would bring a measured move of around $31 on the Qs (breakdown at around $27.50).

range bound

The range continues, with some vicious moves today. The Q's stopped just shy of $29.60 resistance (just above today's R1). The retracement from the morning's strong move fell into a triangle pattern that traded to the downside while chopping around Vwap for most of the afternoon.
The continued downside was awfully swift, moving price back down to PivotPoint support where a perfect little hammer reversed the trend to bring price back to vwap again.On a wider perspective, we can see today's move running up to previous resistance (a higher short-term high), while the swing low of the day coincided with the midpoint of our consolidation range and Friday's swing low ($28.80). Price currently sits wedged between the 20- & 50-EMA on our 15-min chart.
Here's a look at the 60-min chart where we find ourselves in a bearish looking wedge. With a breakdown of this pattern keep an eye on your ultra-short ETFs. Perhaps price direction from this point might largely depend on where the U.S. Dollar Index goes from here.

stuck in mud

The Q's have spent all week within an ever-narrowing range (between about $28 and $29.50 and the narrowest range on a weekly basis all year). Today's range was a little wider, testing the upper parameters, but nothing decisive. We are achieving a higher high, higher low scenario though, and our short-term moving averages are bullish:Today's trading was mostly contained in a slightly positive-sloping channel, with the exception of the open and a late-afternoon test of previous highs (where price was met with resistance and rejected at R1). Today's double top, combined with a negative momentum divergence was a hint at lower prices later in the afternoon where we closed back within the channel.

whippy

A very sloppy day today, one in which I'd prefer to step away from until a direction is determined. I mean, just look at the first hour of trading (the Q's sold off right into S1 (green line) with the wide and indecisive range.
Interestingly there was another "V" bottom (5-minute chart) in today's tape (Friday last week saw a similar pattern), where the selling culminated in a narrow range candle (of the previous 7 bars, NR7) followed by a gapping down doji, and then by a strong green bullish engulfing candle. The volume didn't seem to come into the move until we were above the opening range high, after which the volume came in and brought on a crazy gap-fill.On a longer-term basis we did seem to make a higher low today and a very marginal higher-high. This market is not going down (below $28.50 on the Q's, 8000 on the DJIA) without a fight.

AAPL

AAPL reports tomorrow and it's stock price seems to just be waiting for the news. Sitting right at support, it looks like it's just going to roll over (the weekly chart looks more telling), in which case we could easily see the $50 range soon enough.
DailyWeekly

more bleeding

A very strong trend day down with very little retracement. The Q's put in a lower low and has just barely closed above a nearby support area. Volume was, however, lighter than average. So, across the board with the Q's, SPY, DIA we see a positive momentum divergence on a daily basis.
I was thinking that we could be in the stages of a right shoulder of an inverted Head & Shoulders pattern, but the recommendation for such a pattern suggests the shoulders be of nearly the same distance from the head, and instead we find our current "right shoulder" being twice as far from the "head" as the distance to the "left shoulder" was. Here's a daily of the SPY:
Here's a look at the Q's over the past 10 trading sessions on a 15-minute basis:And here's a look at today's activity.
Notice the bear flag within the first 1.5 hours. Drawing a Fibonacci Price Extension tool on top of this flag gave us a potential target for today's trend (of which it tagged, and nearly closed on). I didn't include the momentum MacD in this chart (that I typically have on my 5-minute charts) as it's basically irrelevant within a trend day.

0 to 27 in 3 hours

I wish I would have kept a closer eye on SKF today. This issue, with it's large range capability, has so much home-run potential for traders.
After gapping down this morning SKF filled it's gap, carved out a pennant formation and then just took off, gaining $27 from it's opening price, before settling back around VWAP later on in the afternoon.
Check it out on a $1 range bar chart.

opex

OPEX friday today, which created some messy charts from what I was looking at.
Here on the Q's we gapped up to R1 before losing steam and consolidating into a triangle, where a break-down retraced before continuing to Pivot Point support. The turn around in price left us with a V-bottom before we continued up to the highs of the day.Checking out the 15-min chart we see the confirmed 20- & 50-EMA crossover taking place at this morning's open. The higher probability strategy is to short a momentum exhaustion back to the 50-EMA and/or buy the re-test of the50-EMA on strength. Next week we're looking to buy a higher low or perhaps short a failure of breaking the resistance of today's highs.

squeeze

The Q's made a double bottom today right around the same time the DJIA broke 8k.
A hint that the second test of the lows was going to hold was the momentum divergence coinciding with a bullish harami candlestick formation on the 5-min chart.
The squeeze was on when price recovered previous day support. The 15-min chart has also experienced (at end of day) a near crossover (and retracement) of the 20- & 50-EMA. The Q's on the daily chart show a break-down of the trend with a snap-back to the trend line (on higher volume). We're looking for either a reclamation of the trend-line or continuation to the downside.AAPL was a dummy long after gapping down at the open (below the previous day's low), consolidating sideways before starting to make a move for a 50% retracemtent.
USO fell apart after it's all-morning-long sideways consolidation. After it's first strong candle down a bearish flag formed before continuing to new lows (and a fibonacci extension).

AAPL

I was just looking at the chart for AAPL today and thinking that it wasn't looking good while sitting there at support. I was also thinking about the Steve Jobs rumors ("hormone imbalance" ?!?) and how the chart looked, to me, like people in the know, knew what was really going on. Off of this news, AAPL is currently down over $6. Should get interesting to see what happens at the open tomorrow, so much for $28.50 on the Q's holding.

USO

Keeping an eye on Oil here, using USO. Volume has been huge while the lows are being tested, and there's a positive momentum divergence that's been in the making for the past few months. Not to say that a positive momentum divergence can't turn into lower prices, as a break of the lows should surely bring a larger negative momentum push.

hit the stops

Watching the Q's today we had a number of instances where it looked like we could rally. $28.50 on the Q's is a big area of support, after which it looks like an inevitable test of the '08 lows. We gapped down straight away into S1 where price didn't hesitate to get toward the $28.60 area. The rest of the day was a narrow-range sideways consolidation. We had a few point where it looked like we might test previous support areas, but price couldn't make it too much further beyond vwap.
15-min chart x 6-days:5-min. today:
Longer term 30-min chart:Q's 5-min with Nasdaq-TICK in subgraph:
Q's daily chart:Here's a screen shot of something I refer to that uses 3-cycles. Being that we're in a bearish orientation I'm looking for the 3 stochastics to line up in overbought territory and moving down for higher probability shorts.