Spike Failure

Morning shot up on our prior day's "uncertain" analysis (inside joke). We were clearly wrong to have been so uncertain.

Yet again, inventory re-balanced itself over and over, as the push up into the range failed miserably. This market really is "a two way auction process" as Jim Dalton likes to say.  And the current environment is no doubt killing traders who are not experienced with heavily range-bound action.

If I could redo my analysis last night, I'd have probably noted all of those programmed negative TICK readings that simply could not push price down.  With hindsight firmly sitting in my lap, the odds were for a buy response, and I'll note that going forwards.  Shorts are just too panicky is this market overall.

And I almost commented on the mass media getting all hot and bothered over downside.  Only when these folks cut that out, will price fall. At the highs ALL of them were calling for more upside. And that turned out to be the recent top for many of the very high priced momentum stocks.  

With that I have a slight downside bias for Monday's session.

The Eagle (not owl) is uncertain.

A Bunch of Noise

Today was weird -- and flat as a pancake.   NYSE advancers and decliners almost dead even.  Multi-month breakout in 1st hour volume and all the session could do was balance with declining volatility?

Even with all of that volume coming in today volatility was not up -- which was unusual.  Today's range only a 14.5 points versus yesterday's 27.25.

There is something weird in my gut.  I can't tell if sellers were winding up today, cautiously not really showing their hand.   Or if inventory is getting too short and pop back up into the range we will go.

Double Distribution Lower

Our bias for today was up and we got up.  But not for long.

Initial balance basing action never did pick up buying hitchhikers. And the subsequent, predominately below VWAP, price action,  triggered a triangle breakout dump lower at 10:30. Usually it's 11:00 for a programmed dump lower like this.

So it was a textbook double distribution day on the profile and price is now nearing the bottom of the multi-month range and a 8 day range.

Range, range on the wall, which way are you going to fall?

I'm on breakout watch for lower tomorrow but the expected response should be a push higher back up into the range.

Inventory Churn

It is getting exciting that most everyday for over a week now, our next day odds assessment has been spot on for the most part!  

Today featured a pretty decent 10 point gap up.  As price meandered around for the 1st hour, the TICK was clearly waning and indicating strongly of a pending look down into the gap.

And the trade of the day was to buy the minor low of gap fill!  That was just a perfect asymmetrical trade.  And the rally higher was long and powerful, just like in yesterday's session.  The two were very similar.

For tomorrow, and after today's inside range balance, odds are shifted towards a push higher.  Any sort of visual triangulation in this bull market gets pounced upon by the buyers.  But as Brett points out again, momentum is waning underneath the hood.  

And a red bar out of this extended balance, should it print, will be a biggie.  I'm not so inclined to expect big green extension higher. Most likely just grind.

A Bit of Short in the Hole

Nice movement again today after Friday's double distribution sell day on the look above and fail on the daily.

Here are a few slides from Friday's session to review.  Today's session comes next:

TODAY: 
Today offered nice trading on the morning sell channel.  It was steady as she goes downwards until a base with strengthening momentum printed.  The final minor low was right S2, and a minor low of the Fed spike lower a few sessions ago.  Asymmetrical opportunity for sure!

The TICK  was especially telling today as we highlight our insights on the slides.

INTRADAY SLIDES:

 

TOMORROW?
Sellers just stunk up the joint today with a host of divergences as evidenced by Brett.  Most likely an up-test tomorrow of some sorts is what we hang our odds-based-hats-upon this evening.

Shorts Fried

Our long bias was spot on as the shorts covered like babies. (Does that really make any sense?)

Some nice day trades to be had today, while framing the daily structure with the underlying knowledge that a lot of fed day panic shorts were caught short at bad prices.  The VWAP really is the king of all references so many time intraday. Momentum and consolidation patterns were clear as well today.

And the daily now is looking like it wants to bust a move above the 1869 zone.
But the market is firmly range bound, so I'm on watch for more washing machine action.

My bias is for a look above and fail back into the range tomorrow.

Laggard Trap

Smell the effervescent stench of barbecued laggard meat?  Yummy stuff!

Our analysis yesterday was spot on and the Fed Dump was on.

But selling did stop at a visual, mechanical reference and pulled off a mongo excess tail on the 5 minute.  Plus today featured the 1st sub -1600 TICK hit in quite awhile and, quite FRANKLY, for such an extreme reading to NOT punch through a visual level... just makes us wonder... So with that bit of information in our quiver, we are on watch for some shorts to cover tomorrow -- in some fashion.

But was the bit TICK breakout exhaustion or a breakout that will bring in more selling?  There is the gap below.  And the crew here always respects a visual gap to get the programs interested in some downside fill-it fun.

Good By Vampire Desk

Typing on a treadmill now.  Sounds almost like a song.  This thing is great and as long and I don't trip and kill myself, ending up kitty lunch.

We were a bit too pessimistic in last night's analysis, as good news flow came in and the zombie buyers were on the loose.

Trades of the day, if missing getting long near the open, were to pounce on VWAP pullbacks, and also the mid-session continuation coil -- and run for the hills after a few points.  Not massive points, but good solid edge and structure.

It's going to take some negative news to come in, or else the target for this market is the daily all time highs.

But volume totally imploded again today.  This just does not feel like a young auction off of swing lows.  And with the Fed tomorrow, I don't trust this market.

I am frankly biased that this rally is going to fail.

I'll ride it up, but will be ready to pounce if Big Red wants to come knocking.

Onto our analysis:

Low Volume Reversal

So they pulled off a short in the hole.  Not surprising.  Right?

But first, my very cool young stud.  He loves my new stand up treadmill desk.  We can't let Brett post the only cat pictures!  Can we?

He really is a beautiful animal with a great personality.  And he's going to be one regal dude when he grows up.  He enjoyed playing on my daughter's bed this morning.  

He was a Juvenile stray in San Jose, a city of millions.  And somehow he ended up here.  

Market: Surprising just how low the volume was today.  Monday's have been extremely low volume sessions for awhile now, so we expect the Monday hangover effect to silence the desks.  

But today was a just a utter, block-buster, fart-out with FIRM multi-month lows in volume for the NYSE on a gap up, swing higher day.

How can we trust a short squeeze with no volume?

Right, we cannot.

Odds are for sellers to come in tomorrow.

Friday Balance

But you can use liars, naysayers, and mediocrities to make you stronger.
--The good Doc never ceases to keep them coming, does he?

Yet another wonderful example of high-odds post trend day balance.

And the poke below yesterday's trend day's lows, a true wheelhouse trade -- time and time again. TRADE OF THE WEEK!

So now we wait until Sunday to find out if fresh bad news brings in more sellers, or if it's short in the hole time.

Today's slight downwards bias probably shifts odds for short in the hole.

Responsive Sellers Beatdown

Our bias was correct buyers would take it higher.  And our suspicions about the quality of yesterday's auction were also correct.

We did previously mention the all-mighty-cosmic-powers of the gap?  Right?

Geez!

Today was nothing short of a subsequent beat down, taking out and shooting all of yesterday's long inventory -- and then some.  

The downwards action was tricky early going.  Frankly, I saw little signs of a vicious trend move lower unfolding.  IB balance volume was lower than yesterday's, a multi-month low in fact. (We note this on the slides)  Only a viciously trending TLT had me wary.

The collapse broke a few patterns that have been tried and true as responsive buying was nowhere to be found.

So, it's very clear now that the market has indeed changed as 3 of the last 4 sessions have opened higher and sold off. It sure feels "different" this time, like longer time frame sellers are at work.

This market has a lot of support zones close at hand.  Tomorrow is high odds for balance after today's trend day.

A lot of inventory is very short now, but if they want to take it down more fine.

They could print many more days like this in a row.  And a buyer responsive bid would not surprise at all either.