Thurs. 1_19

The QQQ has made a fresh 11-year high today.  There's the chance that we could get a climactic capitulation move followed by a strong (healthy) correction, but then there's the chance that price completely detaches from rationality.  Over the course of 1-year the QQQ has tried to achieve the $60-mark 4-times.  Now it seems to be accepting $60 in its 5th attempt.  Some bearish scenarios would be a blow-off top at the trend-line throw-back or a 2b-top setup.  Otherwise, this rocket could be ready to launch.  Maybe we end up seeing $70 before $55.

wed. 1_18

Way too many setups to post today.  There's always at least one 'good' day during the week of OpEx.  The trick is to not get chopped-up in the not-so-good days of the OpEx week.
Here is a split time frame of the ES as we were going into today.
The higher time frame trend has been very strong and continues to put in higher lows and highs.
Starting from left to right; the 240-minute chart shows a strong trend with the 3/10macd showing the 2c/d criteria, so we would look for a 3d setup on a faster time frame.  The 60-minute time frame provided the 3d setup while the entries on the 15-minute chart are highlighted with up-arrows.

Notice that the 3d setup occurred in the pre-market (around 5am EST) as well.  In this case the move was quick and after testing resistance price conveniently returned to the 1287.50 support just in time for the Open.

update

I posted this SPY weekly chart a while back showing similarities in price structure, then and now. Currently price is trying to recover the neckline to its previous H&S top:

And the DIA throw-back to its H&S neckline:

The QQQ and what could be perceived as a complex H&S pattern:

The IWM right at the neckline from its previous Head & Shoulders top:

 It is what it is.  Throw-backs often expend a lot of energy only to run out of steam and have the bottom drop out.  It will take some strong upward momentum to recover, and it needs to do so soon in my opinion.

tues. 1_17

Boring day.  Many trades ended up being closed for break-even.
AMZN was a good long, but took it off WAY too soon.  I actually exited on a trigger to go long (second up-arrow under the macd).

FSLR long was basically a b/e trade, really should have gone short at $40.25 for that 2b short setup

GS long, another b/e trade.  I was targeting the $100.35 area and price just came short.  The short setup played out well though (2d-to-4c continuation, a.k.a. Bear Flag).  The first up arrow and first down arrow are a long entry and the long Sell to Close. 

Overnight ES

Just a quick look at the ES overnight pre-holiday edition.  Whatever it does likely will not include the higher time frame "big money", but it is what it is.  A split view of the 15-min (left) and 5-min (on the right).  The 15-min is showing the 2c-2d criteria (pullback following bullish momentum while showing a reverse divergence) while the faster time frame is setting up the 3d criteria at support.  Looking for price to break the overhead trend line (on the 5-min chart) and the fast line turn green.

Well, it had a rough go of it, but was able to test higher without breaking down from support.

AAPL flag

First of all, you just can’t shouldn't fight this trend:

It's worth watching this flag for a break higher

small inverse H&S on the intra-day chart

Of course, if it breaks that $418 area below it could create an abandon ship type of move and could be worth a short position for a day trade.

Copper Rally in the making?

Interesting  bullish developments in Copper.
The daily time frame broke out of a symmetrical triangle with decent volume after consolidating a strong sell-off.  The weekly showed that regardless of the strong momentum behind the September selling, price consolidated constructively above a previous swing low (above $3.0).
This symmetrical triangle breakout gives a measured move which coincides with a 50% Fib.  projection off of the seed wave which has formed since the October lows.

Look at the monthly chart and we get even further warning that price could rally hard from this point.  After all, price broke down from a trend line that was in place since the January '09 lows and a throw-back to this trend line wouldn't be out of the question.
So, say we rally to our symmetrical triangle measured move (50% projection) but then fizzle out.  This could then set up a pretty blatant Head & Shoulders pattern (neckline at the $3.00 mark).

Essentially, a rally looks to be in the works, but it would be prudent to stick with fixed targets (namely that $4.14 measured move price point) as there is obvious overhead resistance to overcome.  Also worth remembering, should the breakout fail then longs will be trapped, creating a strong move in the opposite direction.

Worth Watching

Going into this next week or two I'll be watching for AMZN long entries.
The higher time frames have a strong trend in place, with trend line support.  The recent downside momentum was the largest ever, which could be an omen for things to come.  However, this shows itself as a reverse divergence on the higher (monthly) time frame which often leads to snap-back rallies (which may or may not form its first lower high).
Monthly:  Trend intact, reverse divergence (2c criteria).

Weekly:  Trend line holding on a small divergence

Daily & intra-day charts:
The daily has an inverse H&S pattern on diverging momentum (setting up a possible 3d setup).  Certainly wouldn't want to see it give up $170 below (actually wouldn't want to see it fail the 50% Fib retracement of the Head to right shoulder).  The first hurdle above will likely come from the $182.76 level.
Primary target $199, secondary $216.  Essentially I'd like to see a break of the overhead trend line on a strong momentum bar.

Higher Time Frame

If you have read understood much of what I post on this blog, I use this confounded "code" (3d, 2c, 1a, etc.) simply as a means to describe (in shorthand) the criteria of the 3/10macd which in turn highlights a structure occurring within price.  With that said, here is what is happening with the higher time frame S&P 500:
Here is a split window of the monthly (left) and weekly (right) price action.
Things of note;
2c set up on the monthly - which is really just a reverse divergence.  When looking to trade a "2c" setup I look for a few things on the faster time frame which include a "3d" setup, 3-pushes to a low, and/or an inverse Head & Shoulders or strong seed wave, which is exactly what we see on the weekly chart (trigger to enter was 5-weeks ago on 12/16).

The only concern I would have with the above setup is the bearish tone to the trend on the monthly chart (50-period MA trending down while the 20-MA corrects into it) which can turn into a Head & Shoulders pattern (2b setup) or a climactic top (say at 1400).  Essentially price is going to have to break out of this 1300 overhead resistance with some serious momentum (say greater or equal to the previous 10-month long upward momentum) which in turn could start a new cycle of higher highs.  If momentum fizzles price can still go higher but price would give clues to signs of weakness.

Fri 1_13

Resilient bulls.
Going into the open, provided there is a decent amount of pre-market activity, I like to keep my charts/indicators loaded with that pre-market activity.   Here is what the SPY looked like going into the open; giving two short entries (4d-to-4c continuation; one before the market opened) and two long entries (based off of the 3d setup). Price is still running higher (last check was at $129.3).

Compare that to what it looks like without the pre-market

Just throwing in a chart of the SPY with breadth...A/D line was solidly bearish throughout the day, but it would seem shorts don't want to push their positions.

Higher time frame look....support held, though downward momentum was quite strong.  Monday the markets are closed and Friday is Opex, should make it interesting (or really uneventful)

Some trades:
NFLX at the open this morning provided a continuation move (1b-to-1a)

entering on a faster time frame got you in a bit quicker, the 5-min trigger was late and extended
below the left-hand chart is a 2-minute

I also entered NFLX later in the day for a scratch

FAS was a quick trade that should have been held longer

thurs 1_12

Another good example of the A/D zero-line acting as support today.   First the initial bounce in the first half-hour of trade.  Price support ended up corresponding with a -200 reading (mildly bearish).  A/D line bounced at zero 3 times later in the afternoon as extreme negative TICKs on higher lows indicated a bullish divergence.

Some trades:
BTU - 2c setup.  Later in the day there was the chance of a continued test higher, but ended up scratching at b/e

GS - continued to show strength (or squeeze).

Really disappointed in missing this as I was watching for it yesterday.  A channel/flag break in NFLX

Also disappointed for not taking this short in the SPY this morning (2d-to-4c continuation, or simply, a bear flag).  Notice that the 15-min 3/10macd (top indicator) showed a lower low while price made a higher low/double-bottom, which gives us a buy divergence, while the 5-minute 3/10macd formed an inverse H&S (as did price).

Wed 1_11

Some decent setups today.
First was GS early in the morning and later in the afternoon (2c setup)

FSLR- I have two up-arrows on the 5-min 3/10macd.  The first shows a valid long entry trigger, but I didn't take it as price felt extended.  I did enter on the second up arrow though.

GLD- into the close with a 2c setup

Thought I would include this chart of the SPY with the TICK and Advance/Decline.  I mentioned in a past post about watching the A/D line and its interplay with the zero-line.  Here was a good example of how sellers were hitting resistance points, but once the A/D line recovered zero the buyers seemed to be in control.  Also worth noting, price held the 50% retrace from Monday's gap up.

tues 1_10

I'm really not good on days like today; the big gap up day (or down for that matter).  The momentum should tell you not to aggressively fade and what I would consider overhead resistance makes me hesitant to put on long entries.  Not to mention a momentum indicator is rendered useless (until later in the afternoon when it catches up to price).  What I end up doing to combat such a dilemma is use a "gap-less" indicator, one in which the gap is muted so that it doesn't exaggerate the move.  As I mentioned, the indicator does catch up to price later in the day, so I just use this indicator for the first 3-hours of the day.
So, in the chart below I've done two things;
1) I'm using a gap-less 3/10macd indicator
2) I'm using a 5-minute chart, however, the first 3/10macd has settings that reflect the 15-minute time frame, while the second 3/10macd has default settings for a 5-min chart (also the moving averages have settings to reflect a 15-minute time frame). 
So I have just combined two charts into one essentially.  The two down arrows reflect short entries (first exit was at $129 support while the second exit was $129.2 after the double bottom).  The up arrow was a long entry (half taken off at $129.3 other half for break-even).

and here is what it looks like using a regular 3/10macd.  The gapless indicator made it easier to see a more bearish tone to the price action.

All-in-all not a fun day to be messing with the broad indices.  However, there were issues that had a nice trend to them.

I missed the better entry in FSLR (first up arrow) but did get in before it broke higher (second up arrow)

NFLX illustrates a good example of when to take momentum divergences.  It has had a strong trend these past few days and pulled back into support on higher momentum.  Exits taken around $96 resistance zone.

monday 1_9

2c setup in AAPL today didn't quite work out for me. Original stop was $0.80 which would not have gotten hit until the $425-test failure. However, I took a 10-cent loss on the position as I was looking for more of a squeeze move higher from my entry.

NFLX just continues to squeeze. If there is one pattern combination of Moving Averages and 3/10macd this is it.  Exited 10-min before the close.

same as yesterday

Basically the same scenario as the previous day;
Gap down
Buyers respond at support
Continue higher for the rest of the day
The 3/10 macd had similar characteristics as yesterday as well.
Instead of a V-bottom like yesterday we got a seed wave/ascending triangle pattern.
Exits are where indicated, however the entry was not the up arrow (apologies).  Entry was as the power bar was occurring, entry price of $127.09.

more 2c

Took GS long giving consideration to the 2c condition on the 30-min chart while the 15-min chart showing a stark reverse divergence.  The faster time frame showing the inverse H&S pattern and 3d criteria.  First target at the intra-day supply point (coinciding with the Open price).  Second half taken off on failure to follow through.  Not a great trade, but it worked out.

Here is another example of the 2c setup occurring in Crude Oil.  The 50% target was hit without a hitch, but the 100% projection was hit only at the end of the session.

new year same setups

2c setup - entering a pullback in a bull trend
Momentum shows a reverse divergence while the faster time frame shows 3-pushes to a low or inverse H&S pattern (3d criteria).
SPY

GLD

XLF

3d setup into the close yesterday for a number of issues, here's XLF

Corn

While I'm away, with limited broadband speed, my posts will be limited as well.
Here's a 3d setup in the daily chart of Corn.