Perhaps it’s the crystal crack meth I’m holding in my portfolio, and the fact that each of them is a loser, but what looks like minor damage on the S&P has my portfolio down 1.5 percent today.  If I was heavy long, sure, that makes sense, but with cash over 50 percent it comes as a bit of a surprise.  It’s like oh hello April, I see you’re coming in like a lion.

So I’ve been forced to take two losses today; first I cut Yelp, and this afternoon Ford.  Here’s the gist, at this juncture, I’m not loosening risk and letting setups work.  Ford very well could turn around this week, but the daily chart is sloppy, and not something I’m lending patience to right now.

Yelp plum fell on its face, as did most of the social media space. To hold even a trace would be a disgrace. I want only the ace. I want the ace.

My holdings now are (by size) CMG, ANGI, AIG, ZNGA, CREE, and old pokey aka AWK.

We could talk about each and what they’re doing, but you have charts yes?  You see much of what I do, no?

Here’s my bottom line: there’s lots of POMO on tap this month.  It’s a strange environment.  As we wind down into the close, we’re getting a b-shaped profile, suggesting long liquation and not much more.  The sellers made progress on many individual charts, but they haven’t taken the big board yet.  Moreover they haven’t controlled the big board all year.  However, this is a new quarter, a page turn if you will.  Therefore we all need to stay vigilant.  Like, why the hell is the Yen so strong today?  Just be cognizant of the environment.  I’m a bit unsure, hence my huge cash.

Be well.

Being a heathen of the highest order, it’s only fitting that the Lord would strike me and my family down with the influenza over the weekend.  A wave swept through our households violently, like the air from a vengeful sarcophagus.  Much like The Ben targets short sellers.

It’s death by vomit then dehydration for the short sellers.  Their only Gatorade is a margin call then rehab.

Let’s take to the profiles, shall we?

Click the chart to enlarge it to “chocolate bunny” size and read the key notes:

Early on I’m looking for sellers.  I don’t expect much from them, and I’ll look for buyers to balance out the trade above 1559.  Once the data comes out at 10am EST, I’ll look for either party to begin pushing their initiative.  Depending on who is asserting control of the tape, either the above profile notes for downside come into play, or we take out the highs and pump.  I’m ready for either.

Don’t let anyone fool you, it’s April first, fool.

http://youtu.be/V-_NMAllsJc

Before we attempt liftoff today buyers will want to defend the following levels.  If they don’t, I have my line in the sand for reducing exposure:

Futures are 10 handles lower since the European market opened. Here are some important levels of interest today:

How we trade relative to the following sign posts will give me information regarding who is in control of the tape. Continuing to trade within this range signals consolidation/indecision, which is still a postive environment for individual setups.

I’m looking for buyers to take a more active role in today’s tape. They’ve been getting tossed about quite a bit this week by some rather large sell flow.  But overall we seem to be in some rough, choppy waters.

I’m hesitant to give the bears an edge here, although I do give an edge to volatility.

Early on we’re up 3.5 handles from the close yesterday.  I’m looking for sellers to enter and try and close the gap back down to 1539.50.  If buyers don’t show up then a critical test of 1538 will result.  This level saw large reactionary buying that was able to stop the sellers in their tracks yesterday.  I plan to lean on these levels and try some longs.  However, if it is lost, and trade sustained below, I will raise cash into the weekend.

http://youtu.be/292-GQ3xgZ8

Yesterday’s tight range managed to auction the value area from last Friday (annual high water mark) and successfully find sellers who were willing to send price tumbling back down to value.  The overnight session has been quiet and as we approach 8:30am the markets are unchanged.

Early on my expectation is for sellers to reenter the market and probe lower for buyers.  I’ll be looking for signs of a buyer reaction first at the high volume node from Tuesday’s upper distribution then at the value area high.  Should the sellers press through the value area high, I’m expecting them to press down to 1538.

To the upside, any sustainable trade above the 1550 zone highlighted above could be considered constructive for the bull camp, especially on a closing basis.  There were several traders on Twitter yesterday suggesting a possible island reversal on the SPY, trading up to these levels would firmly negate that price theory.

Should price sustain above 1550, I will measure bullish conviction by the size of their rotations and the price levels they’re able to accomplish, especially a clean break of the highs set last week.

I’m looking for some responsive selling off the open, looking for sellers to present themselves at the 1552 level.  However, the last two days and the erratic pumps higher show greater risk of being steamrolled if short.  A caution long bias or cash are the best positions.

For me, the time when we’re trading within the range of a previous auction is where my edge is the sharpest.  The reason being I can get close to the action and laser focus on where participants have made themselves known.  With that in mind, and to tune out unnecessary noise, today I present only the previous two sessions of trade.

I’ve highlighted below what can only be described as an aggressive reaction by the buyers.  They woke up Monday with the futures bouncing off their Sunday lows and they came to the market with buy orders.  It wasn’t until we reached Friday’s value area low that the flow of sell orders was enough to stop the liquidity march higher.  The afternoon attempt to dictate price lower by the sellers was shut down, and another aggressive buying reaction footprint was left on the profile.

Should the buyers not behave in the same manner at the levels highlighted below, that tells me something has changed.  What has changed?  Don’t care bro, something.  The sentiment of the buyers has changed in a material way and they’re backing off their bids.

Up above, the sellers cleared were a greater force and stopped price in its tracks.  Keep in mind, however, that this was after a 14 handle intraday rally.  Today is a big POMO day with $2.75 – $3.50 billion in outright Treasury Coupon purchases (source: ZH).  Should all that liquidity find its way into equities, we need to closely monitor price behavior within last Friday’s range and act accordingly.

Trade well, be water.