UPON FURTHER REVIEW
After watching all the Grains have large down bars yesterday, I decided to wade into the Meal trade I covered yesterday when it bounced a little during the night session. I have to admit that I took smaller size than normal on this trade due to how strong this trend is. This is far from an obvious pattern, but that divergence is so strong I wanted to have a small position just in case. As with almost everything, if the stock market does not decline, this won't either as ridiculous as that sounds. I have covered ad nauseam in here why this is the case so I am not going back into this again. It is annoying but it is what it is. The powers that be are reversing the 5000th overnight down session in a row in the SP 500 as I type this, so odds on this trade are probably not very good.
Here is another market that is flying, aren't they all? However, we have a possible trap here that could be sprung today.
I have to say I am not completely thrilled with this one but it was close enough to be worth pointing out. If we were to trade today below yesterdays low it would indicate the breakout to new highs was a trap. If we combine that with quite a bit of divergence, it is a trade worth considering.
The last chart for today, is that of Bonds. Here I have also indicated the places where another once very reliable indicator, POIV by Larry Williams, has just become worthless. You can see where it indicated strength just to watch price collapse. Historically this has been the very best indicator of all for divergences, and yet it has steered views in the wrong direction over and over during the Ben Rally. I have no explanation for this at all to be honest. I just know I have kicked it to the curb now except for very special situations like that which I pointed out the other day in Unleaded Gas. Bonds are bouncing here and possibly setting up a short entry. I don't see in what I watch anything supporting this being a low here yet. If by some miracle we had a small decline in the SP 500, this market would rally. However, short of God intervening to stop the Fed, the odds on that even with all the reasons why it should happen, are not that good.
See you on Comedy Central! It does not appear I need a second joke yet.