Opening Range Breakout - NQ Futures
http://3.bp.blogspot.com/_LsWQWmRqnWY/SZsvcdZEfcI/AAAAAAAAIBQ/JApijnZZeTU/s400/nq.pngM is bearish and W is bullish. The Nasdaq futures gapped down on the open and carved out a bearish M pattern on the 1 minute timeframe. Place the fibs from the ORL to resistance - top of M pattern and short the breakout. Alphabet patterns h, inverted h, and W/M usually result in fast moves. I took a partial after 3 WRBs or 150% fib. extension. The first line of support/resistance is the 5 period EMA. I was hoping it would hold as resistance, but it felt like it would give way at 1185, so I exited balance on stop. The second line of resitance is the 20 EMA and it is miles away, so best to lock in gains and watch for a second entry. Turned into a chop fest for the rest of the day as neither the bulls nor the bears, took ownership.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SZsvb19i5LI/AAAAAAAAIBI/D11H91BizwU/s400/nqm.png
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Posted by Jamie at 2/17/2009 04:41:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, M_Pattern
Monday, February 16, 2009Technical Picture - Contraction Precedes Expansion
http://2.bp.blogspot.com/_LsWQWmRqnWY/SZovCZHYrtI/AAAAAAAAIBA/KonFgfyZiEY/s400/spxweekly.pngFutures are testing last week's lows and all this contraction in the charts is leading to expansion. So be ready for a breakout early this week, possibly tomorrow. Monitor volatility (VIX) for early signal and don't forget to keep an eye on safe haven gold stocks for long setups.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SZouhvzrN-I/AAAAAAAAIAw/7thqK-6HVeE/s400/comp.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SZouhYcd0VI/AAAAAAAAIAo/QBoznL7eX7Q/s400/namo.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SZouhGZvNrI/AAAAAAAAIAg/556RJKX_kjY/s400/xlf.png
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Posted by Jamie at 2/16/2009 10:25:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Thursday, February 12, 2009Opening Range Breakout
http://4.bp.blogspot.com/_LsWQWmRqnWY/SZTUcMJ9pAI/AAAAAAAAIAY/nx8Aig4HBWA/s400/ntap.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SZTT3gWMZXI/AAAAAAAAIAI/D1xpM-x6mi4/s400/rimm.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SZTTp0G20lI/AAAAAAAAIAA/_t-p5ZpWRL0/s400/pot.png
Traded NTAP, RIMM, POT long. NTAP and POT were sweet, RIMM was not.
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Posted by Jamie at 2/12/2009 06:45:00 PM 9 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, ORBO
Wednesday, February 11, 2009Technical Picture - Consolidation
http://2.bp.blogspot.com/_LsWQWmRqnWY/SZOL8_Kt4PI/AAAAAAAAH_0/w--zm_qHTss/s400/spx.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SZOGLAU2xHI/AAAAAAAAH_k/qtilLHwbhoc/s400/comp15.pngThe opening range quickly set the highs of the session, which was a snooze fest up until early afternoon with a minor breach of intraday supports, followed by a reversal and rally back up close to session highs.
The markets continue to probe but hold near trendline support off of the Nov-Feb lows. As long as the indices can hold above their respective trendlines, there is potential for further retracement over the short term. However, the aggressive rejection from resistances yesterday, gives the impression that the retracement will only be temporary- another lower high. Too early to tell, but these supports could be broken sooner than later, so best to be ready.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SZOGLMRVqnI/AAAAAAAAH_c/njJK2jsGnwk/s400/nbi.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SZOGLLdcfMI/AAAAAAAAH_U/sIsPZCYq24E/s400/xlf.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SZOGfo**SI/AAAAAAAAH_s/Jz1Lu7Ek9Cg/s400/xlf.png
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Posted by Jamie at 2/11/2009 09:14:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Gap & Go - Research In Motion Limited (USA) (Public, NASDAQ:RIMM)
http://2.bp.blogspot.com/_LsWQWmRqnWY/SZN1_hPiXgI/AAAAAAAAH_E/aY-slZ43Xvw/s400/rimm.pngRIMM gapped down on lowered guidance. Price tested the round $ number $50.00 and tried to save itself, but sellers prevailed. It's hard to know exactly when to get in because the gap is so wide and the pivots are so far above price. Look for narrow range price action to develop with reasonable stop. Here I'm placing my Fibs from yesterday's close to the ORL. The OR is too narrow and the gap too wide, so I think this gives a reasonable target. But I took a partial at $48.00 to lock some in. Eventually, the 50% fib. extension was reached.
NVDA was much easier because we can key off of S2. Cover as price approaches the whole $ level.
Missed the gold stocks rally off the open - Fast moves to R2 - AEM and GG, and ABX didn't do to badly either.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SZN1_QXoZ0I/AAAAAAAAH-8/xDGVBCD_CKg/s400/nvda.pngHES - 2 IBs - partial at whole dollar level. There's a base at the blue line which may or may not hold as support. Morning star reversal pattern - cover balance and long.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SZN1_NroCMI/AAAAAAAAH-0/S7JfQ1NmrDw/s400/hes1.png
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Posted by Jamie at 2/11/2009 08:01:00 PM 6 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, Gapper, Morning_Star
Tuesday, February 10, 2009Technical Picture - Bearish Evening Star Reversal Pattern
http://1.bp.blogspot.com/_LsWQWmRqnWY/SZJQSwCRhtI/AAAAAAAAH-s/5PPA0Kh05fk/s400/comp.pngBroad based selling started as the Treasury Secretary laid out the bad bank plan. Not enough details, or buy the rumor and sell the news. I'm not sure but it feels slightly overdone. Most of the market and sector charts carved out a bearish evening star reversal patterns like the Nasdaq, on higher volume. Little on the plus side except GLD and silver.
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Posted by Jamie at 2/10/2009 11:11:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
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Tuesday, February 10, 2009Bearish Hanging Man Reversal Pattern
http://3.bp.blogspot.com/_LsWQWmRqnWY/SZIsectt5WI/AAAAAAAAH-k/fVVG4sSM5Kk/s400/forex-candlestick-hammer-hanging-man.gifFollowing last night's trading post, we had some interesting questions on the correct timing and entry of the bearish hanging man candlestick reversal pattern.
Let's go over Steve Nison's criteria:
We recognize both the hammer and hanging man (HM) from:
[*]the real body is at the upper end of the stick's range;[*]the lower shadow should be at least twice the length of the real body;[*]No or very tiny upper shadow.[*]The longer the lower shadow, the shorter the upper shadow and the narrower the body, the more meaningful the pattern.[*]In terms of stating the obvious, when used as reversal patterns, the hammer would come after a decline and the HM after a rally.My notes - this second last point is a problem when it comes to stops, that's why I don't like to trade off of a wide HM or hammer. I usually wait for a lower risk entry point. I also prefer my hammers to be green and my HM to be red, but Nison says color is less important.
Confirmation of HM:
Nison says that at a minimum we need a lower open on the following stick, below the real body of the HM, but he usually recommends a close beneath the HM.
He also mentions that the pace of the rally should be slackening. The best way to determine this intraday is with the RSI which measures relative strength.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SZIsebRPB8I/AAAAAAAAH-c/I4JKEwQuLxk/s400/pot.pngOn the POT trade yesterday, which carved out 2 HM, the first of which was foreshadowing a reversal, we clearly see a negative divergence of the RSI to higher prices relative to the previous session.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SZIseOcJvbI/AAAAAAAAH-U/QsHxVKk17Ic/s400/fwlt.pngOn the FWLT chart, also from yesterday, we see the continued strength in the RSI when price prints a HM early in the session. This would not have been a good candidate to short following HM because the rally has yet to show signs of slackening.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SZIsePO2CwI/AAAAAAAAH-M/_JajBrRS6hc/s400/rimm.pngThe RIMM chart from today, shows 2 HM after a retracement. The RSI is clearly not enthused by the higher prices and this sets up a perfect short. If you use volume as the indicator, the entire retracement took place on declining volume.
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Posted by Jamie at 2/10/2009 06:40:00 PM 8 comments http://www.blogger.com/img/icon18_email.gif
Labels: Hanging_Man, RSI
NQ Futures Trade - Geithner Plan
http://4.bp.blogspot.com/_LsWQWmRqnWY/SZHyG2NpKFI/AAAAAAAAH-E/OeS3kRRLULw/s400/nq.pngAnother buy the rumor, sell the news story from Washington. Remember we had a nice pop on the rumor of the bad bank plan on January 28th. Now, when the actual details of the plan, or lack thereof, are announced, we sell.
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Posted by Jamie at 2/10/2009 04:29:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Monday, February 09, 2009The X-List - BAIDU.COM, INC. (Public, Nasdaq:BIDU)
BIDU has been on my watch list since exhibiting range contraction on the daily chart in mid-to-late January. I caught a nice trade on Jan 28th. Since then, it has displayed whippy consolidation action until today. Early today, BIDU was my %change leader and drew most of my attention.
The daily chart (left) was a nice setup - notice the convergence of multiple moving averages - leading to today's gap up. The 10 minute chart (right) has key levels highlighted. The first entry (first arrow) easily fits under Trader-X's New Simplified Rules (ah, but which setup?). I entered on the 7th 10m bar, although an aggressive entry could have been made off of the 5th 10m bar. The first exit was at the 1.38 Fib extension. The second entry was off of a narrow-range inside bar at the opening range high (ORH) which gave much lower risk than the first entry - also exited at the 1.38 extension, but it almost reached the 1.62 extension.
http://1.bp.blogspot.com/_QeS-aqinJjo/SZDyw3VjhjI/AAAAAAAAAFM/HDmmEhC47T8/s320/BIDU_020909_Daily_10m.JPG
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Posted by Jim at 2/09/2009 10:10:00 PM 7 comments http://www.blogger.com/img/icon18_email.gif
Labels: Daily, Fibonacci, NRIB, ORH, Trader-X, Watchlist
Profit Taking - Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)
http://4.bp.blogspot.com/_LsWQWmRqnWY/SZCgoIBlu3I/AAAAAAAAH98/xln-YZBOljA/s400/pot.pngPOT took out PDH and extended 50%, printed a big hanging man, retested the highs but couldn't push through R2. The second hanging man, strategically placed at R2, provided a very good clue that POT was going to come into some profit taking.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SZCgoCF85II/AAAAAAAAH90/MxsdWV1PdNI/s400/sco1biib.pngSCO and BIIB were from the gapper focus list. BIIB was a coil and move back to ORH, followed by a long, almost painful, wait for the anticipated C&H to develop.
SCO was an ORBO with extension following the gap fill consolidation.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SZCgn06TWlI/AAAAAAAAH9s/7U6woY6ILOI/s400/sco.pngSLB, also from the gapper list, was a good intention for a H&S BO, but I missed the entry. Hope you got involved.
The key criteria for H&S tops are big volume on LS and Head and relatively little volume on the RS. SLB meets the criteria and delivers a fast trade - gap fill and perfect measured move - 100%
http://1.bp.blogspot.com/_LsWQWmRqnWY/SZCgn9V_6NI/AAAAAAAAH9k/VwHiXHpWBjw/s400/slb.png
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Posted by Jamie at 2/09/2009 04:26:00 PM 14 comments http://www.blogger.com/img/icon18_email.gif
Labels: coil, Fibonacci, Hanging_Man, Head_and_Shoulders, ORBO, Pivot Point
Sunday, February 08, 2009Trader-X Rules
Inspiration and trading insights from Trader-X.
[*]Five rules for life;[*]Fibonacci rules;[*]Simplified trading rules.
Collect the entire Trader-X series in this handy Jack Bauer messenger bag.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SY97hllILPI/AAAAAAAAH88/nK_GxvGl4kg/s320/24bag.jpg
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Posted by Jamie at 2/08/2009 06:43:00 PM 14 comments http://www.blogger.com/img/icon18_email.gif
Labels: Trader-X
Technical Picture - Markets Bounce Back
http://3.bp.blogspot.com/_LsWQWmRqnWY/SY9PrUlI4zI/AAAAAAAAH8c/GY_38C6UiKQ/s320/comp.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SY9PrSHA7gI/AAAAAAAAH8U/k2hRHWbt640/s320/spxweekly.pngThe markets shrugged off negative data with the indices opening firmly higher despite weaker than expected Non-Farm Payrolls (-598 K, largest decline since 12/74 vs. consensus of -540 K). Markets put together a minor extension into midday with another minor round of buying in the afternoon. The weak data wasn't surprising, but traders are now focused on the potential vote/passage of the stimulus package/plan to stabilize the financial system. Short covering has been key in the recovery over the last few sessions as some of the most heavily shorted sectors (finance, banking, homebuilders and transports) have been providing upside leadership.
According to IBD we're in a confirmed rally with caveats, as the markets contuinue to live and die with headlines and runours. The NASDAQ is outperforming as we can see from the chart above. It is positive for the year, but still needs to take out and hold the January reaction highs to confirm a reversal. For now the markets are somewhat extended.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SY9PaXdkf2I/AAAAAAAAH8M/101VLCER6N0/s320/bank.jpgIn the meantime, Geithner postponed his unveiling of the administration’s plan to shore up the financial industry from Monday to Tuesday, as officials focus on getting approval for the economic stimulus plan.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SY9PaacHlFI/AAAAAAAAH8E/IwS1Yn55MSw/s320/vix.pngClick on charts/pics to enlarge
http://4.bp.blogspot.com/_LsWQWmRqnWY/SY9PaNEOXSI/AAAAAAAAH78/53Z3uU7NO7c/s320/cboe.png
2008 was a bad year all round - economy, movies, and music. In a year with too few really good films, and even fewer good discs, tonight's Grammy's promise to be a bit of a snooze. Coldplay (always a favorite here) shouldn't have any trouble sweeping.
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Posted by Jamie at 2/08/2009 04:25:00 PM 1 comments http://www.blogger.com/img/icon18_email.gif
Friday, February 06, 2009
http://3.bp.blogspot.com/_LsWQWmRqnWY/SYywEH3IrRI/AAAAAAAAH7s/iuIcH94hryQ/s320/ma.pngMA - Pivot holds as support - 3rd test of pivot support is the charm.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SYyvrA8-6YI/AAAAAAAAH7c/-xxfbMXnfXo/s320/v.pngV - ORBO followed by 3 tests of the base.
HIG - original short was scratched. Eventually carved out a solid B&B at the half dollar level.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYyvEwbayFI/AAAAAAAAH60/RISGiCB7rTI/s320/HIG.png
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Posted by Jamie at 2/06/2009 04:40:00 PM 13 comments http://www.blogger.com/img/icon18_email.gif
Thursday, February 05, 2009Technical Picture - Gap Fade Outside Day
http://1.bp.blogspot.com/_LsWQWmRqnWY/SYudrxy8CLI/AAAAAAAAH6s/8V3MaYEc3jg/s320/comp.pngThe markets gapped lower on the open in the wake of lower than expected initial claims, but the bad news was quickly faded, followed by a minor pause and another thrust. The afternoon was mostly sideways consolidation ahead of tomorrow's all important jobs data.
The NASDAQ has the best looking chart with a bullish engulfing stick today on higher volume. We closed above the 50 DMA. We have a higher low and moving towards a retest of the most recent high. However, the jobs data will set the tone for tomorrow's trade.
Financials got a boost on mark-to-market rules chatter. Sounds like a desperate option to me.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SYudrjEfaLI/AAAAAAAAH6k/Dh-Cawjj5y4/s320/jobless.jpg
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYudroaYaMI/AAAAAAAAH6c/OS2LIjta54w/s320/xlf.png
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Posted by Jamie at 2/05/2009 09:16:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Earnings Gap - Visa Inc. (Public, NYSE:V)
http://3.bp.blogspot.com/_LsWQWmRqnWY/SYuDhyEaJKI/AAAAAAAAH6M/HvZT-8fxyKc/s320/v.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYuFqHxSQVI/AAAAAAAAH6U/t6kc_30Wah0/s320/v1.png
V was an earnings gap but was too far extended and couldn't break through $55.00. The sympathy play was a better trade with MA.
Shorted V because it formed a perfect triangle on 1 minute chart. The short trade was more satisfying than the long.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYuDh1-vHPI/AAAAAAAAH6E/HuMtcfEyLCc/s320/ma.png
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Posted by Jamie at 2/05/2009 07:20:00 PM 8 comments http://www.blogger.com/img/icon18_email.gif
DIGG The Dinosaur
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYteLthkUgI/AAAAAAAAH58/qzy0b23fl5Y/s320/DIG6.JPG
If you can spare a couple of minutes, DT is looking for some Diggs on this post.
If you're not a Digger, it only takes a few seconds to register.
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Posted by Jamie at 2/05/2009 04:44:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Labels: Entertainment
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Wednesday, February 04, 2009Biotech Breakout - Amylin Pharmaceuticals, Inc. (Public, NASDAQ:AMLN)
http://1.bp.blogspot.com/_LsWQWmRqnWY/SYo7Gt96u5I/AAAAAAAAH5s/difZ9fEbXJA/s400/amln.pngLast night we said that biotechs were poised to breakout and they delivered. AMLN, ALXN, CEPH to name a few. AMLN, ALXN, and CELG had NR daily bases ready to expand. Basically, you look for these to break on the OR and use the previous late day lows as the stop. If the late day lows are breached before the BO occurs, the trade is aborted. These setups are higher risk, but usually the rewards are big.
Don't place your buy stop order exactly on the the previous day high, give it 5-10 cents depending on the price of the stock.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYo7Gmf9WiI/AAAAAAAAH5k/tOoPvsHz6Ls/s400/rio.pngRIO and SID were gapping into the daily spots.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYo7GRV4QcI/AAAAAAAAH5c/O3UZsH9HUww/s400/sid.png
Markets sold off in the afternoon after testing resistance - rounded tops are bearish (look at QQQQ or NQ futures charts) - too much supply - every time bulls try to push prices higher, they are met with more and more supply. Problem is knowing when to short. It seems that the easiest way is to let price break below base and catch it on the retest if it fails to recapture the prior base.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYpLZ0iwrPI/AAAAAAAAH50/hkXUTEMJa3s/s320/cisco1.gif
CSCO guided lower after hours and auto supply manufacturers pleading for big bailout, futures trading lower so expect a weak open tomorrow. On the plus side V, AKAM delivered better than expected earnings.
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Posted by Jamie at 2/04/2009 08:00:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: ORB
Tuesday, February 03, 2009Technical Picture - Afternoon Bounce
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYj1CuD1H5I/AAAAAAAAH5U/6eiwDQpWl6Q/s400/comp.pngAfter testing yesterday's highs in the morning, we managed to break through and close higher in the afternoon. Still, there's a lot of resistance overhead. As we await the all important jobs data on Friday, I expect limited upside.
Biotechs have carved out a solid base, let's see if the sector can breakout and hold.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SYj1Cno4C1I/AAAAAAAAH5M/Ww_EVRAtUjg/s400/nbi.png$USD looks weak. If it breaks we could see some commodity sectors get a bounce.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SYj1CYA_1kI/AAAAAAAAH5E/HbWIsxoLIZ8/s400/usd.png
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Posted by Jamie at 2/03/2009 08:51:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Dummy Trades
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYjDsiyrUYI/AAAAAAAAH48/t9kNhVuT_1U/s400/biib.pngBiotechs were the best performers on my radar today. AMGN retested the base but the 20 EMA was close enough to provide support and get things back on track. BIIB was a nice momentum move as you can see from the accelerating volume.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYjDQEJrGKI/AAAAAAAAH4s/UFbeGboju10/s400/amgn.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SYjDQFMY0gI/AAAAAAAAH4k/huloGeOMEKc/s400/coco.pngCOCO was gapper on an earnings beat with improved guidance. OR breaks out of the daily base on big volume. Since the OR is wide, place fibs. from ORL to ORH as per Trader-X guidelines. I had a buy stop order ($20.52) in place after bar 5 but it took a long time to trigger. Well worth the wait. Partial after 1 pt.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYjDPwhujJI/AAAAAAAAH4c/eVaus1TCZnE/s400/dis.pngDIS is an after hours trade on an earnings miss. Inverse C&H on 1 minute timeframe. Target achieved like a hot knife through butter.
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Posted by Jamie at 2/03/2009 05:16:00 PM 9 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, Gapper, Momentum
Sunday, February 01, 2009Technical Picture - Waiting for a Lower Low
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYZl80bogLI/AAAAAAAAH4U/pJ5BdSVIIWw/s400/spx.pngBearish trend intact, awaiting a bad bank stimulus plan. A well thought out plan could take weeks or months to develop, at which point we should get a technical bounce. In the meantime, we are likely to retest the November lows.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYZl8oy9pSI/AAAAAAAAH4M/l45puKQvmWQ/s400/spxweekly.pngOn the weekly chart, the bearish trend is intact until we can take out the initial reaction high from the lowest low (January high). If we breach the Nov. lows just slightly, that scenario is still valid, but if we make a much sharper low, then we start all over again.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SYZl8ZXn8UI/AAAAAAAAH4E/h9ZdphVfcb4/s400/xlf.png
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Posted by Jamie at 2/01/2009 10:15:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Thursday, January 29, 2009Technical Picture - Backing & Filling
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYJvR3g4pmI/AAAAAAAAH38/6xfPXvAGGyU/s400/spx.pngAfter four consecutive higher closes, the markets gave back all of yesterday's gains. Bad data and weak earnings prompted the lower volume retracement. Financials lead the way down. Little on the plus side except Gold.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYJvAHnJw-I/AAAAAAAAH30/lCIrAJLuvcM/s400/xlf.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYJvAEHtWtI/AAAAAAAAH3s/Ys6DKv5lwS8/s400/abx4.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYJu_yCm8aI/AAAAAAAAH3k/EKUi7-exE5M/s400/sndk3.pngWasted effort on this SNDK strategy to add to the swing trade on a break of the PDH. Ended up dumping the whole thing when the markets failed to bounce off of early weakness.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYJu_sxrBOI/AAAAAAAAH3c/c_bDgplMtfs/s400/abx.pngMissed the first leg up on ABX. After gapping and testing the PDL, ABX squeezed back up to the PDH, consolidated and extended 50% in the afternoon.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SYJu_V47AII/AAAAAAAAH3U/QUoW8Sc7c6M/s400/nq.pngBase and break the NASDAQ futures. I was a little too confident of a gap fill lower and stayed in the second half too long. Should have had a stop at the 50% fib. level, but I didn't.
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Posted by Jamie at 1/29/2009 09:43:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Labels: Base and Break, Squeeze
Wednesday, January 28, 2009Technical Picture - Stimulus Induced Breakout
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYEJM2HXnmI/AAAAAAAAH3M/94wYlSlPY8k/s400/spx.pngThe market broke out of the box with a gap open and extended into midday. After a sideways drift, the market established new session highs prior to, and shortly after, the Fed, before succumbing to some choppy profit taking followed by a late push into the close.
Triggering the broad based push off the open was word that the government is working on a plan to help banks dump toxic assets. This would help banks protect against losses stemming from asset write-downs.
Broad based rally with Finance pacing the way + 13% and gold/silver on the losing side.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SYEJM3TZCDI/AAAAAAAAH3E/ItARcPIfM6s/s400/namo.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYEJMZshJOI/AAAAAAAAH28/Xql-HI6LTsM/s400/vix.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SYEJMJmB7cI/AAAAAAAAH20/Bw9bU2-SlrI/s400/xlf.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYEJLv88SaI/AAAAAAAAH2s/Otl2K3JtHs8/s400/xau.png
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Posted by Jamie at 1/28/2009 08:38:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Opening Range Breakout - Barrick Gold Corporation (USA) (Public, NYSE:ABX)
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYD6rNkfRQI/AAAAAAAAH2k/uQwWXCZCjXU/s400/abx.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SYD6qz3JcrI/AAAAAAAAH2c/baMy1rxzJIg/s400/gg.pngBoth ABX and GG carved out the h short setup in the opening range. ABX filled the gap from last Thursday-Friday, but GG did not. We talked about ABX filling the gap a couple of days ago.
ABX set up a second entry - long out of an inverse H&S type pattern.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYD6qysozrI/AAAAAAAAH2U/kxp6S_clBT8/s400/sndk.pngSNDK swing long as discussed over the weekend. Perfect inverse H&S on the 3 minute timeframe. I partialed ahead of the FED, swinging balance as per chart below.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SYD6qkG9EsI/AAAAAAAAH2M/w6HsObeOJQg/s400/sndk1.pngIt so much easier to find good setups when the markets BO. Easy setup on the Nasdaq futures.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SYD6qqFULtI/AAAAAAAAH2E/jC-LVP60nVs/s400/nq.png
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Posted by Jamie at 1/28/2009 07:35:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Labels: h_pattern, Head_and_Shoulders, ORB
Tuesday, January 27, 2009Snooze Fest Edition
http://4.bp.blogspot.com/_LsWQWmRqnWY/SX-CEliUlaI/AAAAAAAAH18/4-gVIcogG9s/s400/amgn.pngOpening Range BO - AMGN - formed a mini inverse H&S pattern which failed and set up a short. Minor extension. AMGN spent most of the day trying to recapture the 200 DMA. Maybe a better trade tomorrow.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SX-CEqCJUvI/AAAAAAAAH10/2vAuALmagVs/s400/nq.pngNasdaq futures were choppy most of the day, but when they retested the daily high and were forcefully rejected, it set up a short opp. Most of the profit came through after the cash market closed at 4:00.
Kicking myself for missing my beloved RIMM - nice momo move today.
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Posted by Jamie at 1/27/2009 04:50:00 PM 8 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, ORB
Monday, January 26, 2009Interesting Article on Day Traders
Being A Day Trader
Ordinary investors may flee the market’s dizzying ups and downs, but Peter Milman and his kind hang on tight while riding the giant waves of uncertainty. There’s nothing more exhilarating than to catch the perfect surge.
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Posted by Jamie at 1/26/2009 11:57:00 PM 6 comments http://www.blogger.com/img/icon18_email.gif
Labels: Trading
Technical Picture - More of the Same
http://1.bp.blogspot.com/_LsWQWmRqnWY/SX51plcypLI/AAAAAAAAH1s/asU0-PCDEzU/s400/spx.pngThe markets were unable to sustain early strength following the better than expected existing home sales and leading indicators. S&P and Nasdaq both took out recent range tops, but DOW did not. This non confirmation led to a full retracement, followed by 50% bounce back to end the day modestly higher. Financials were once again the weak link, and this is starting to feel more like a bear flag than a box play.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SX51onK2Z_I/AAAAAAAAH1k/TvpFPwcgqP0/s400/namo.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SX51FABlT4I/AAAAAAAAH1c/6To01ta1bwI/s400/xlf.pngAs anticipated $USD moved back below trendline and into the wedge.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SX51E7mLoFI/AAAAAAAAH1U/-ZY3hbopQYM/s400/usd.pngTrade Setups for tomorrow:
MS and GS testing trendline support. If they break, we can expect a nice retracement back to pivot areas.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SX51EuYMp_I/AAAAAAAAH1M/8xmZ4ENBAFE/s400/ms.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SX51Ena0tMI/AAAAAAAAH1E/LIeqUyjsE88/s400/GS.pngABX - another name testing its trendline on 15 min. Could be a good for a gap fill.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SX51EaAfyQI/AAAAAAAAH08/VQzVexHvhAQ/s400/abx.png
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Posted by Jamie at 1/26/2009 09:42:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
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Monday, January 26, 2009Opening Range Breakout
Place fibs from early pivot high/low and trade the opening range breakout (ORBO) or pullback to the R-zone.
Recently, most of these trades generate 50-100% extension and retrace, because the markets are range bound and can't get any traction.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SX5Hr8YCQ-I/AAAAAAAAH0k/kacGWxJoMSQ/s400/rimm2.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SX5HqhfrJ0I/AAAAAAAAH0c/us1ppHt1EFI/s400/agu.png
Planned Trade:
After the Breakout Trades, I look to the 15 minute timeframe for some higher quality setups that have a better chance to run. Yesterday I posted this chart of RIMM.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SX5JCI0-iQI/AAAAAAAAH00/6gP9xCRjwwY/s400/rimm.pngAnd today, after the initial test of the PDL, it retraced to the R-zone, but couldn't close above Fib. 50%, so it was just a matter of time, before it fell back down.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SX5JBrvw_SI/AAAAAAAAH0s/Ce4HBRURGws/s400/rimm3.png
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Posted by Jamie at 1/26/2009 05:30:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, ORBO
Saturday, January 24, 2009Technical Picture - Whipsaw Week
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXyqLamcFsI/AAAAAAAAHzg/jlpaqXR2wa4/s400/spx.pngThe market is trading in a box and whipsaw was the theme of the last three sessions. No need to trade until the box is broken. Hard to make money on non-trending days.
After three consecutive lower closes on the weekly, I favor a pause or snap back rally. But the markets are jittery and highly sensitive to the news and earnings of the day. Stay nimble.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXyqLE7uPUI/AAAAAAAAHzY/ejsGh0XtSYU/s400/spxweekly.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXylaWPN9AI/AAAAAAAAHzA/Fb6czMUfHn4/s400/moo.pngAgchem also a box play. Looks and feels like it wants to make a move towards the base. A lower USD would help this sector. I favor POT as the move is in play with Friday's breach of the $74 pivot.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXyysT_d7VI/AAAAAAAAH0A/iMEw2jkgWvA/s400/pot.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXylaFaktLI/AAAAAAAAHy4/pSTZw8UnX4w/s400/xau.pngGold is strong, but needs to consolidate the big move.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXtm41vs-RI/AAAAAAAAHyw/LQi4KkcX75Q/s400/usd.pngUSD will retrace or reverse. $CAD already made a big move Thurs. & Fri. against the greenback.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXtm4_PeWcI/AAAAAAAAHyo/RgrRjqYqJps/s400/crude.pngOil looks ready to move higher out of a well shaped H&S bottom. Keep some oil names on the focus list. I'm watching CNQ, ECA, SU, OXY.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXtm4qiPVHI/AAAAAAAAHyg/xbyYBuVeARo/s400/xlf.pngFinancials are consolidating after a retest of the Nov. lows. Lots of charts looks like BAC below. If this breaks to the upside, it could be a sizable move. Keep a few names on the focus list and get ready to jump in.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SXysxJz7nfI/AAAAAAAAHzw/Quf5lUcnzjY/s400/bac.png
Click on charts to enlarge and read comments.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXtm4qExxNI/AAAAAAAAHyY/r149Hyy3Cc8/s400/sndk.pngSNDK daily and RIMM 15 min. I like the strength in these two names if tech can do something this week. SNDK in play as long as the trendline holds as support.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXys3lv-1zI/AAAAAAAAHz4/IshMX1sCBiI/s400/rimm.png
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Posted by Jamie at 1/24/2009 02:05:00 PM 10 comments http://www.blogger.com/img/icon18_email.gif
Friday, January 23, 2009A Couple of Trades
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXpAVbxHucI/AAAAAAAAHyQ/jQArM8kfbOo/s400/abx.pngABX - low risk entry at base of PDH. We talked about this one a while back.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXpAVBebBAI/AAAAAAAAHyI/-YzmCRtW7k4/s400/abx1.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXpAU5BjNEI/AAAAAAAAHyA/9gzVjQ4uZ9k/s400/pot.pngTwo scenarios on the POT trade - C&H or NRIB. We talked about this last night, so hope most of you caught it.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXpAUuVm-AI/AAAAAAAAHx4/vbVKZZoX500/s400/pot1.png
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Posted by Jamie at 1/23/2009 05:09:00 PM 3 comments http://www.blogger.com/img/icon18_email.gif
Thursday, January 22, 2009Technical Picture - Consolidation
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXk74oKBoLI/AAAAAAAAHvE/jLqFdF44VoQ/s400/spx.pngWhipsaw was the theme of the trading day. The markets gapped lower on a combination of key earnings misses from MSFT and others, more banking woes, and weak economic data. Prices opened in the Fibonacci R-zone and slipped lower, but then buyers started stepping in. Prices chopped around the mid-range and finally ripped higher to close the gap. As soon as that was accomplished, they moved back into the mid range.
Clearly we've broken the downtrending channel, but there's so much resistance overhead. Not sure what awaits us tomorrow, leaning towards more consolidation, notwithstanding any major negative headlines.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SXk74Rwlp8I/AAAAAAAAHu8/57c9go9y0Go/s400/es.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXk73tIb6NI/AAAAAAAAHu0/KcWgKIgK3No/s400/vix.png
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Posted by Jamie at 1/22/2009 10:38:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Earnings Gap - Apple Inc. (Public, NASDAQ:AAPL); Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXkshIZQZkI/AAAAAAAAHus/pQzadVO0i1M/s400/pot1.pngAAPL and POT were the 2 earnings gaps that I was focused on this morning. Both had huge earnings beats and both guided lower. POT gapped lower and squeezed vertically making it hard to get it. Luckily it paused and briefly consolidated just above the $70.00 level, . My preliminary target was $74.00 pivot point level. I was going to swing the second half but decided to bail EOD because the trading day was so all over the place, I'm not sure what to expect going into tomorrow.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXkshF7UJgI/AAAAAAAAHuk/LVBCNd_5Ybo/s400/aapl1.pngAAPL gapped wide despite the negative opening market sentiment. I place my fibs from the ORH to the early pivot low and entered long as price paused at the cusp of the R-zone. Price retests and holds support of the ORH on a closing basis and easily reaches the next fib. level.
Price retraced and found support at the base of the R-zone. The second test of this level gave me confidence to enter a second time.
Keeping both of these names on the focus list for tomorrow along with a couple of other Canadian names mentioned in the HCPG newsletter tonight.
MS has retraced 62% of the January slide in just two days. The trendline is steep and momentum declining on today's thrust, but a good name, along with other broker dealers (GS and JPM) to keep on the WL near-term. Some good charts here.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SXlEMR_R_bI/AAAAAAAAHvM/n5UYXXIJLnY/s400/ms1.png
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Posted by Jamie at 1/22/2009 09:28:00 PM 9 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, Gapper
Wednesday, January 21, 2009Technical Picture - Technical Bounce on Financial Strength
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXfhClR8m3I/AAAAAAAAHuc/uBuCtypwkNU/s400/spx.pngShort covering in the financial sector on positive news (NTRS +30% better than expected earnings; PNC +37% lower loan losses projected). Early momentum stalled, but after an orderly pullback, and some narrow range base building, the midday breakout was followed by a steady uptrend.
The S&P formed a tweezer bottom, piercing line reversal pattern. The strong pattern in conjunction with the recent oversold technical posture raises the probability that a more substantial recovery is underway. Initial resistance above is at 845 with a more important zone at 855/857 (congestion/last Friday's high/38% retrace of Jan slump).
After hours AAPL beat by $0.39 and futures trading higher.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXfhCsh0_tI/AAAAAAAAHuU/5w7ECMCeybE/s400/xlf.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXfhCCMqgNI/AAAAAAAAHuM/d0WQERAeKac/s400/vix.png
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Posted by Jamie at 1/21/2009 09:58:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Financials Bounce Back - Morgan Stanley (Public, NYSE:MS)
http://2.bp.blogspot.com/_LsWQWmRqnWY/SXejPMeM6jI/AAAAAAAAHuE/xJ1K3OGsRQk/s400/xlf.pngThe first chart is XLF.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXegshy9saI/AAAAAAAAHt8/w2iMOqtq9hE/s400/ms.pngI traded MS. Place fibs. from opening pivot low to early pivot high and pick your spots. The first trade out of the R-zone. The second trade was just a scalp out of a nice little base. The third trade formed a narrow base on the early pivot high. You also could have traded NR7 NRIB on 15 minute shortly after the third entry (1:15 EST bar on 15 min.)
http://2.bp.blogspot.com/_LsWQWmRqnWY/SXegsQtnBDI/AAAAAAAAHt0/XQQ2R-1ltpk/s400/ms1.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SXegsAXAVSI/AAAAAAAAHts/wA-c_IPuE7s/s400/MS2.png
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Posted by Jamie at 1/21/2009 05:22:00 PM 5 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, NR7, NRIB
Tuesday, January 20, 2009Technical Picture - Bears Own It
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXZ6qZ2uqwI/AAAAAAAAHtc/OtQAq4Fh5cU/s400/spx.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXZ7KsHd8II/AAAAAAAAHtk/ahFKo4gX0KM/s400/xlf.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXZ6qL5cgHI/AAAAAAAAHtU/CJIUhwsmAFI/s400/namo.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXZ6qACrKMI/AAAAAAAAHtM/30TBXdjhjxA/s400/vix.png
The stock market started the new week and new presidency (inauguration day) on a firmly negative note, easily wiping out the minor upside bias noted at the end of last week. Financials were hammered in early trade and after a brief reprieve during midday, appreciably extended the swoon, keeping the stock indices on the defensive all day. While Financials (down 15%) including brokers and insurance paced the way lower breaking supports, the declines were broad based with little in the plus side other than Gold GLD +2%.
Last week's bounce was paltry given the 62% retracement of the Nov. lows to the Jan. highs. This kind of lackluster bounce suggests that unless we see a sustained rebound like a shakeout, the door is wide open to further near term deterioration. Support at 800. Having said all that, the market is oversold and we did see TRIN close above 2.0 which suggests excessive selling pressure and potential for a bounce over the short term. But, it will take a move all the way back to last week's bounce highs just to neutralize the negative bias.
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Posted by Jamie at 1/20/2009 05:45:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Gapper Trade - Goldman Sachs Group, Inc. (Public, NYSE:GS)
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXZFlOduOAI/AAAAAAAAHtE/e_tA33fW9pE/s400/abx.png
The $USD spiked higher today. Precious metals also rallied, in an otherwise weak, choppy session on inauguration day.
ABX took out the PDH in early trade and manged to reach the 50% Fib. extension of the PDL to PDH before retracing back to the trendline.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXZEPKRIPFI/AAAAAAAAHs0/2d_XFPzK174/s400/GS.pngGS gapped lower (place fibs. from PDH to ORL) and couldn't recapture the ORL on a closing basis. After that I waited for a low risk entry as the consolidation range broke down.
I was somewhat pre-occupied with watching the inaugural events on TV, so I exited before the secondary target was met.
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Posted by Jamie at 1/20/2009 04:37:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, Gapper
Monday, January 19, 2009Technical Picture - Bearish Week Ends on Positive Note
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXVJuxUkp_I/AAAAAAAAHss/gm-yhYAFOao/s400/spx.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXVJuj33zfI/AAAAAAAAHsk/qKXb362yZBE/s400/comp.pngFriday's opening strength quickly turned into a fade as financials could not maintain the upside bias because key names like JPM, BAC and C rolled over. Lots of opportunities to short financials. I traded V, MA, and MS for some nice gains.
But despite financial sector weakness, the markets were able to hold support from Thursday's late day retracement level and close strong. That gives us a follow through day on Friday after Thursday's reversal. The NASDAQ outperformed because it has few financial names compared to the broader markets.
Lots of earnings this week starting with IBM tomorrow and AAPL on Wed.. Check the earnings calendar for your WL stocks.
IBD says we are in a correction but acknowledges that the markets were resilient near the end of the week. Elliott wavers predict we will carve out a lower high before the markets stage a retest of the November lows. Earnings could help that scenario along, or not!
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXUhY9U278I/AAAAAAAAHsc/mtk9rsuYmIM/s400/vix.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXUhY2RwPCI/AAAAAAAAHsU/AyH0ztZ5AVo/s400/usd.png$USD looks like a bearish rising wedge. I expect it to test the lower channel line early this week.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SXUhYhCdNwI/AAAAAAAAHsM/Sinm06FBC1g/s400/xlf.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXUhYQ6IxXI/AAAAAAAAHsE/qC6RDk9nGfA/s400/abx.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SXUhYDDZFsI/AAAAAAAAHr8/-Cx5MbLTYzs/s400/xle.png
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Posted by Jamie at 1/19/2009 07:30:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
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Thursday, January 15, 2009Technical Picture - Technical Bounce on Test of December Lows
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXAOWqRP_lI/AAAAAAAAHr0/EoOo7hfDhUE/s400/spx.pngToday's afternoon rally was courtesy of a technical bounce as the S&P tested the December lows or neckline of the developing inverse H&S pattern. The pattern's not dead yet as we seem to be carving a deeper right shoulder than originally anticipated. On the S&P chart above, the green line represents the neckline and the blue is the shoulder line. Today's technical bounce came with volume so it is encouraging. Now we need to move back towards the shoulder line and hope for a higher high otherwise we'll have a failed pattern and a retest of the November lows not too far behind.
After hours INTC gave some positive guidance and BAC is supposed to get more guarantees $100+ billion.
Tomorrow is OPEX (options expiration).
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXAOWRkk_ZI/AAAAAAAAHrs/-HRquUP0YfA/s400/comp.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXAOWazAlQI/AAAAAAAAHrk/YYbB7i5w_nc/s400/vix.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SXAOWF_BYYI/AAAAAAAAHrc/uSlVKHM_ynk/s400/50ma.png
Percentage of S&P 500 stocks trading above 50 MA has been halved since beginning of January.
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Posted by Jamie at 1/15/2009 11:32:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Shorting the h
http://3.bp.blogspot.com/_LsWQWmRqnWY/SW_vvz_CUfI/AAAAAAAAHrM/epjbDdB9DNE/s400/GS.pngShorting the h refers to a pattern which forms on the 1 minute chart after a weak open - usually 3 consecutive lower closes followed by a shallow retracement which has a rounded form. The pattern has a distinct h look to it. I first saw this pattern in action on Anarco's blog a few months ago. I read about it again just recently, but I can't remember where.
Today we had weak banking stocks due to some worries over BAC so I decided to have a look at GS as a sympathy play. Price quickly tested yesterday's lows so I plotted my fibs from the early pivot high (A) to the early pivot low (B). Price tried to retrace but couldn't break above the 38% level and slowly moved back to the pivot low forming an h pattern.
My primary target was $70.00 from the 15 minute chart above, but I wanted to take some off if price stalled. For a while I thought it was going straight down but after the first big volume spike I was on notice that it would soon capitulate. Took a partial 150% at exit balance at the $70.00 round number.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SW_vvg1H5oI/AAAAAAAAHrE/a0lmmc89c_o/s400/gs1.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SW_vvtTHMcI/AAAAAAAAHq8/S112QkDnXjQ/s400/gs2.pngSusan asks in reference to yesterday's NQ futures trade:
In the Nasdaq future example of Jan. 14, it opened near the PDL and then moved downward. The fib. lines are drawn from PDH-PDL. How to draw fib. lines when price opens inside the previous day range, away from PDL and then breaks the PDL and closes weak - example: V, BUCY from Jan. 15 trade.
From the 15 minute chart below we see that the 15 minute OR opens within the previous day's trading range, but closes below it. We still plot fibs. from PDH to PDL because it's the opening tick that determines fib. placement Trader-X guidelines
The first bar is really weak and almost tags the 50% fib. level. The next bar is narrow and barely retraces the OR real body. This is very bearish.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SW_vvfq5IsI/AAAAAAAAHq0/33gzoJar0o0/s400/v.pngOn the 1 minute chart we also see a smaller h formation.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SW_vvOsEPwI/AAAAAAAAHqs/qOOuGVAw0i0/s400/v1.pngVolatility is much lower now than we were used to in Q4 2008. So when the S&P tested the December lows, it set off a technical bounce, but I wasn't really feeling it. Volume was lame and it took me a while to react. Anyway, I decided to take a position in the NASDAQ futures when they retested the PDL.
On a technical bounce I prefer to use intraday pivots as opposed to Fibs. The pivots are wider and I'm less likely to partial out too soon. After the partial at P, I expected price to consolidate sideways until it came back to the trendline, but it just kept chopping higher.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SW_69ik6BvI/AAAAAAAAHrU/wY_FM7TuWlI/s400/nq.png
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Posted by Jamie at 1/15/2009 09:19:00 PM 6 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, h_pattern
Wednesday, January 14, 2009Fibonacci Placement Cont'd
http://3.bp.blogspot.com/_LsWQWmRqnWY/SW6m4_87jzI/AAAAAAAAHqk/_qMT6vT-cu4/s400/nq.pngNasdaq futures gapped lower on the open. The open was even with the PDL, so I place my fib lines from PDH to PDL. How do we know this is the correct way to place the Fib. lines? From the price action - NQ spent most of the session confined to the R-zone in a sideways consolidation.
On the 1 minute timeframe, I notice that NQ starts to form a bearish flag, so I plot my fibs from point A (ORH) to point B (beginning of flag). Notice how the top of the flag tags the 50% retracement level at point C. I actually entered short before the actual flag break, but normally you wait for the BO as depicted on the 1 minute chart. The first point of support on a flag pattern is the low of the pattern at point B. Notice how price consolidates at point D, forms a small base and then continues lower after testing the downsloping 20 ema. From there we get a steady move into the R-zone, a good place to lock in some profit. Eventually, NQ breaks lower, but it's a head fake as price quickly forms a bullish rounded bottom. Exit balance. From there it retraces all the way back to former support at point B, which now acts as resistance (point E). That resistance held most of the day as price consolidated sideways. The only time it breached resistance was a head fake and an invitation to short.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SW6m40wGCwI/AAAAAAAAHqc/cTdQm2JSc5o/s400/nq1.pngThe S&P futures gapped wide. The open was outside of the the previous day's trading range, so we place the fibs. from PDH to ORL. Once price broke the ORL, it moved steadily to the R-zone, where it consolidated and eventually retraced back to the ORL which held as resistance.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SW6m4vaUb_I/AAAAAAAAHqU/NpM89uozS5M/s400/es.pngFor ES I placed my 1 minute fibs from the ORH to the early pivot low. I missed the BO, but was able to enter short after price retested former support (now resistance) and started to move lower.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SW6m4bi9u7I/AAAAAAAAHqM/hzT5Yc9m4x0/s400/ES1.png
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Posted by Jamie at 1/14/2009 09:56:00 PM 8 comments http://www.blogger.com/img/icon18_email.gif
Labels: Bearish_Flag, Fibonacci, Support_Resistance
Tuesday, January 13, 2009Fibonacci Placement
http://2.bp.blogspot.com/_LsWQWmRqnWY/SW1QAF3Cr_I/AAAAAAAAHfk/5828rEZmjbk/s400/GS.pngA reader asks:
Jamie, how to set initial target for stocks that open below the PDL, bases at the PDL, breaks and enters the previous day range, example - GS today (Jan. 13). It based below PDL, breaks PDL entering the previous day range, retests resistance (PDL) and moves up. What should be the target/s for these types of trades? Any pointers that I need to remember while taking these types of trades?
According to Trader-X guidelines, we normally look to see how a stock opens versus the PDH/PDL. For stocks that gap down and open outside of the previous day's trading range, we look to place the fibs. from the previous day high to the ORL (15 min. opening range low).
The GS chart above plots the fibs. as per the guideline. How is this useful? It shows that price consolidates between the PDL and the ORL for an hour before making a move higher. The proximity of the R-zone from the PDL gives pause because there is little room for error if price consolidates and/or reverses in the R-zone. Look at resistance levels within R-zone for preliminary targets. Downsloping 50 MA often acts as resistance as well, assuming you're trading off of the 15 minute timeframe.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SW1P3TC_kCI/AAAAAAAAHfc/l9fkEmF_ZlM/s400/pot.pngIn contrast to GS, POT opens inside the previous day's range, but breaches the PDL in early trade, before closing strong. Here we ignore the breach, even if price had closed weak, below PDL. Use the open to determine Fib. placement.
POT rallied up to the R-zone consolidated for a lengthy period of time. It set up NR7 for a B&B entry, but failed to close above resistance. I managed a pt. on the first half, but had to scratch the second half.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SW1Pn-AV1JI/AAAAAAAAHfU/ajMm4VrQ_Cs/s400/nq.pngNQ futures trade - triangle BO.
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Posted by Jamie at 1/13/2009 09:29:00 PM 11 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci
Monday, January 12, 2009Technical Picture - Pre-Earnings Pessimism
http://3.bp.blogspot.com/_LsWQWmRqnWY/SWwPDJeYXnI/AAAAAAAAHfM/rPTS8HPkPZ4/s400/spx.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWwPC308LgI/AAAAAAAAHfE/jVi8mRrQW3A/s400/namo.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWwPCp2QIdI/AAAAAAAAHe8/_yKuNhIPxNs/s400/cboe.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWwPCiZn_0I/AAAAAAAAHe0/4pAW_7n8z8k/s400/vix.pngClick on charts to enlarge
Late day support kept the markets from closing at session lows. Still, losses were deep and broad-based, extending last week's declines. The rising wedge channel has clearly been breached, however, volume was just slightly higher than Friday, leaving the door open for some stabilization after a deep pullback. 850 is a key pivot point support level for the S&P.
The recent downturn came as market participants prepared for an earnings season that began this evening when Dow component Alcoa. Despite, lowered guidance, AA missed by a long shot and after hours, the stock closed well above session lows.
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Posted by Jamie at 1/12/2009 10:40:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Trading Key Support/Resistance Levels
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWvmynbNTaI/AAAAAAAAHec/ZJiiQmh9QaA/s400/pot.pngPOT gapped down and carved out a wide range bearish stick. Place the Fib. lines from the previous day high to the ORL or the key support level as I did here. $80.00 is a psychologically significant round number and was a key support level on Thursday's gap down as price consolidated at that level for an hour before filling the gap.
Look for confirmation on the lower timeframe as I did on the 5 min. which showed a weak open followed by a sideways bull/bear battle at the S2 level (red dotted line). When it became obvious the bears were winning, I jumped in.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWvmyapb7iI/AAAAAAAAHeU/klucLXN2Ju4/s400/pot1.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWvmyfA-AQI/AAAAAAAAHeM/dQ9v2hOq5rk/s400/SRS1.pngSRS was a gapper which saw ripping on the TI scanner in early trade. Price retraced to a key support level just on the edge of the R-zone. This level was confirmed on the 5 min. which showed price holding and reversing at R1 with support from the rising 20 EMA. I placed my Fib lines from the ORL to the early swing high because this ETF broke resistance on Friday afternoon and setting them from PDL to ORH could result in an overly optimistic target.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWvm60MYh6I/AAAAAAAAHek/tiuqQr6SwAA/s400/SRS.pngThe NASDAQ futures trade is not as obvious, so it's important to wait for a meaningful signal. In this case we had two inside bars (NR7) on declining volume - price/volume contraction ahead of expansion.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWvvLdT1kiI/AAAAAAAAHes/hDsI8NGqzA8/s400/nq.png
Click on charts for larger view.
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Posted by Jamie at 1/12/2009 07:54:00 PM 11 comments http://www.blogger.com/img/icon18_email.gif
Labels: 2_Inside, Fibonacci, Gapper, Support_Resistance
Sunday, January 11, 2009Technical Picture - Bear Market Bounce Under Pressure
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWqkoX93pvI/AAAAAAAAHeE/lJY0rBV8gX8/s400/spx.pngFriday's dismal job numbers pressured the markets. Despite the lower daily volume, the weak close for the day and the week have left the inverse H&S pattern in peril. Pattern failures usually result in fast moves in the opposite direction so we have to watch for the possibility of a rising wedge (red dotted lines). A lower low on higher volume would confirm the bearish pattern.
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Posted by Jamie at 1/11/2009 10:30:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Difficult Action on Friday
Friday's action around the market "support" level that Jamie has been discussing was difficult to trade. Here are two charts from Friday, FSLR long and SPG short, with NRB/NR7 entries in good price zones (with respect to Fib levels on FSLR and the opening range on SPG). I only saw and traded the FSLR chart. SPG did not hit my scanner and was observed after the fact. I was in fear of a quick reversal due to the overall weak market action and skipped the second entry on FSLR.
http://3.bp.blogspot.com/_QeS-aqinJjo/SWqvgUIZfTI/AAAAAAAAAE8/xGIa2ZhZZJQ/s320/FSLR_010909_15m.JPG
http://3.bp.blogspot.com/_QeS-aqinJjo/SWqvj8f_5kI/AAAAAAAAAFE/ZndDSW2HAYw/s320/SPG_010909_15m.JPG
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Posted by Jim at 1/11/2009 09:28:00 PM 1 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci_retracement, NR7, NRB, Opening Range
Thursday, January 08, 2009Technical Picture - Retest
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWa9Zy8cifI/AAAAAAAAHds/HkDqnMJF4Sc/s400/spx.pngThe market has put together a constructive pullback over the last two days to trim the surge off last week's low in half. Weaker than expected retail sales results and WMT's downside guidance helped push prices lower in the early part of the session, but the markets were able to push off the lows in the second half. The NASDAQ was stronger closing up 1.1% vs. 0.34% for the S&P.
Jobs data will set the tone for tomorrow's trade. If the market shrugs off the data and rallies, the bear market bounce will remain intact, if not we'll have to come up with a new strategy. In the meantime, here is a focus list of stocks with solid bases. Also AMZN (prelim. target $60.00), GRMN, FLIR, and PLD still in play.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWa9Rpq7wQI/AAAAAAAAHdc/hAhCq9eYNKU/s400/v.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWa9RR9_EZI/AAAAAAAAHdU/MBZ8XjEvHAg/s400/LRCX.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWa83OFNDWI/AAAAAAAAHdM/It0ifJS-zz4/s400/bmo.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWa82qwtEWI/AAAAAAAAHdE/Db2jTeZmAjY/s400/HIG.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWa82SFYiYI/AAAAAAAAHc8/AiDi_wC-cxY/s400/ener.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWa82Jj0i3I/AAAAAAAAHc0/SRi0fNafDCw/s400/su.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWa81i9_M0I/AAAAAAAAHcs/-E2VcGTOxpY/s400/amgn.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SWbI6HU-3aI/AAAAAAAAHd8/GIYyly90RNE/s400/MDT.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWbI6PtMfKI/AAAAAAAAHd0/TK5_AHFRaOk/s400/fls.png
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Posted by Jamie at 1/08/2009 09:53:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: Focus_List
Keying off the Daily
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWavTWMKceI/AAAAAAAAHck/VrnQgGuwV8E/s400/celg.png
The morning action was narrow range and choppy so it was hard to find suitable setups.
CELG, printed 3 IBs after selling off all week, so I took a chance on a reversal. Once price was able to close above the downsloping 20 EMA, things picked up nicely.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWavTBxHzfI/AAAAAAAAHcc/GSdlZ-JYlMc/s400/amzn.pngAMZN and GRMN have strong daily charts as discussed in the comments last night. AMZN was a symetrical triangle waiting to BO and GRMN set up a Cup & Handle.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SWavSmJoK-I/AAAAAAAAHcU/-gDfLHok8rs/s400/GRMN.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SWauJc2tcQI/AAAAAAAAHcM/a4Asfq--idU/s400/xle.pngThe XLE trade is from yesterday. From a reader:
XLE gapped down today from shooting star daily bar, which is very bearish. Which would have been a better short entry in your opinion:
1) break of IB low (2nd 15 min bar)
OR
2) break of shooting star low which is unable to closed above 5EMA on 5min (9.50am ET bar)
The first 15 min. stick is a hanging man or red hammer. Since price doesn't test the high, we conclude that it is a hanging man. However, the doji which follows is indecisive. I like the action on the 5 minute, but I would scale in until S2 (dotted red line) is taken out.
I place my fibs. on the 15 minute timeframe and intraday pivots on the 5 minute, that way I see the setup from both perspectives.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWauIwtY0FI/AAAAAAAAHcE/BkGZUuwh_SY/s400/xle1.png
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Posted by Jamie at 1/08/2009 08:03:00 PM 12 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, NRIB, Pivot Point
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Wednesday, January 07, 2009Fear and Greed
Markets are said to be efficient when fear and greed are kept in balance. Market bubbles occur from excess greed and bubbles burst and over correct out of fear. The recent oil and commodity bubble was brought on by greed and the ensuing correction was excessive out of fear.
On a micro level, day traders have to deal with emotions of fear and greed everyday in their trading. Fears of losing and missing out are basic. The fear of losing usually leads to tight stops that may cripple the trade before it has time to develop and the fear of missing out usually comes in the form of abandoning the entry rules in order to chase stocks that are ripping.
Greed usually manifests itself by being swept away with a winning position, thinking it's going to keep ripping and turn a mediocre day into a big winner. Dreams of this nature can cloud the trader's perspective and force him (her) to throw trading rules out the window.
The most realistic approach to trading is to aspire for consistently profitable trading results by applying focused and disciplined trading rules. A disciplined approach to trading rules will help the trader manage entries and exits, thereby relieving the trader from acting purely on the emotions of fear and greed.
A 50% win/loss ratio can be a very profitable business if the trading rules are consistently adhered to. As long as winners run at least 2:1 over losers, and preferably 3:1. But every trade has to meet certain pre-defined criteria and the trading rules have to be applied in a consistent and disciplined manner. If either or both are missing from your trading plan, your trading results are likely unsatisfactory. If this rings true for you, the beginning of a new year is a good time to start elaborating the criteria and the rules.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SWVheCzjvpI/AAAAAAAAHbU/huZHsEaPafo/s400/BTU.pngA reader submits the following: BTU: Entry on the break of the 11:45am candle which is an inside NR7 bar. It was also basing under the round number $28.00 and it looked liked it tested the PDH a few times. Target just ~ $29.00. Action went sideways for most of the afternoon until a nice little jump at around 2:30ish. Had a decent profit but gave most of it back because it never reached my target. In retrospect I should of at least partialed after the 3 WRB.
Okay, I'm not sure why the target wasn't met, because the Esignal chart shows that it was tagged. I would just like to emphasize the need to sell into strength and you should plan the exit as price approaches the target for example exit at $28.95 as opposed to exactly $29.00.
The entry is good NRIB (NR7) at the base of PDH. The long basing period may have contributed to a sense that price could go higher than the initial target, however, we have to stick to our trading rules - 3WRBs, Fib. targets, whole $ dollar levels are all areas of profit taking and/or consolidation. Take at least a partial. If price consolidates and wants to move higher, there's nothing to prevent you from adding back.
Made a similar play in ACI and I was wondering if it is stupid to do that since they are basically in the same space as each other. They were pretty much moving in lockstep.
Not stupid at all. I often trade pairs because it's much easier to manage two positions in lockstep than not. Always good to find ways to capitalize on sector strength/weakness.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWVhdiNGVEI/AAAAAAAAHbM/DYKRsW8Ybps/s400/BTU1.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWVlVCQmw_I/AAAAAAAAHbk/LudGKF5MgTY/s400/gg.pngThe GG trade is mine. I took a partial at $28.00 after a small profit because it was an obvious support level. In my heart, I had a good feeling that it would eventually go lower, but price is pre-disposed to consolidate at obvious support levels, whole $ levels, fib. targets, 3 consecutive red bars. I'm being repetitious on purpose. The key take away is sticking to the trading rules to protect profits. Price could have easily reversed at support and retraced.
As I said above, there's no reason not to get back in if price consolidates and wants to continue in your direction. This GG consolidation is a thing of beauty - a series of lower highs on a flat base with the 3 MAs (5, 20, 50) squeezing into a tight formation. Burn this 1 min. chart to memory.
I re-entered full size, partialed again when price stalled at the half $ and exit as price approached the whole $ level on capitulation volume.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWVlU3DP2gI/AAAAAAAAHbc/IQ659a9mzSA/s400/gg1.png
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Posted by Jamie at 1/07/2009 08:41:00 PM 8 comments http://www.blogger.com/img/icon18_email.gif
Labels: 3_WRBs, Fibonacci, target_trade, Trading_Rules
Technical Picture - Consolidation
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWRBD9lruJI/AAAAAAAAHbE/dRr-hSimHd4/s400/spx.pngA healthy dose of consolidation following the thrust out of the H&S base is good. We are overbought and the VIX is consolidating after a steady move lower into a support (congestion) area.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWRBDoTca0I/AAAAAAAAHa8/cD2-qYsq8VE/s400/namo.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWRBDgPrpeI/AAAAAAAAHa0/_p5jYs4uYS8/s400/vix.png
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Posted by Jamie at 1/07/2009 12:42:00 AM 0 comments http://www.blogger.com/img/icon18_email.gif
Daily Setups
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWQ6q81sKsI/AAAAAAAAHas/fzhuTknOWio/s400/pld1.pngPLD is stock I added to my watch list recently when it showed up on the TI scanner. Today it broke out of a solid base , following range contraction, the significance of which Jim highlighted in the last two posts below.
As you can see from the daily, this setup is ideal for a swing trade as well as a day trade. I think PLD will run to $20.00, so if you missed the BO today, you could get a second chance in the coming days.
On the 15 min. chart below, the opening range is extremely wide, so it's best to place fibs from ORL to ORH as per Trader-X guideline # 4.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SWQ6qj32yxI/AAAAAAAAHak/t3VC04oRx7o/s400/pld.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWQ6qqgL6xI/AAAAAAAAHac/wLTc8JFQ9z8/s400/amzn1.pngAMZN also formed a solid base with several pivots over the last few weeks. Yesterday's gap was faded but price fell into a sideways chop. Today, it moved in for a retest of yesterday's high and set up a relatively easy entry. The only thing I didn't like, was the sideways action immediately following the entry, but when it finally decided to go, it was sweet.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWQ6qZuq-_I/AAAAAAAAHaU/y76zwTMxU0U/s400/amzn.pngBMO is on my Canadian WL which is quite short, so it was easy to spot.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SWQ6p42lLgI/AAAAAAAAHaM/lE5U9CZDfM8/s400/bmo.png
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Posted by Jamie at 1/07/2009 12:13:00 AM 6 comments http://www.blogger.com/img/icon18_email.gif
Labels: Base_Breakout, Fibonacci, Opening Range
Tuesday, January 06, 2009Daily Range Contraction - Follow Up
Last night I posted a mystery chart (FDX) that had a range contraction (RC) setup coming into today. FDX did not exhibit intra-day price action that was worth trading today. However, FDX is still a good RC setup (see daily chart below) and will remain on my focus list. In fact, FDX currently has one of the lowest RC indicator values across the stocks that I scan.
http://1.bp.blogspot.com/_QeS-aqinJjo/SWQSMa7FBfI/AAAAAAAAAEE/J8n2-yqxJ7Y/s320/FDX_010609_DRC.JPG
Other charts from my daily RC list did exhibit tradable action today. The first chart below shows the daily RC setup on PRU. The second chart shows PRU's 15m intra-day chart. I missed the BO within the first 15 minutes, but caught the bull flag.
http://3.bp.blogspot.com/_QeS-aqinJjo/SWQSuZJbvVI/AAAAAAAAAEU/POyVpKpXHL8/s320/PRU_010609_DRC.JPG
http://4.bp.blogspot.com/_QeS-aqinJjo/SWQSzS7IcuI/AAAAAAAAAEc/tPnF-YEV-wk/s320/PRU_010609_15m.JPG
Traders really enjoy unknowns. So, here is another mystery chart from my daily RC list. Notice the 3-day box setup which has taken the RC indicator back down to a low level...
http://1.bp.blogspot.com/_QeS-aqinJjo/SWQS8DEyOcI/AAAAAAAAAEk/EPBuhm74tRc/s320/Mystery_010609_DRC.JPG
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Posted by Jim at 1/06/2009 08:45:00 PM 6 comments http://www.blogger.com/img/icon18_email.gif
Labels: Box_Play, Daily, Focus_List, NBR
Monday, January 05, 2009Daily Range Contraction - Mystery Chart
Jamie is a fan of "hunting for focus list stocks from the dailies and setting alerts at key S/R levels to prepare for the trading day ahead". Following the principle that range expansion follows range contraction (RC), I use a custom indicator to help scan the dailies for RC or box setups.
The first chart below is a daily chart of FWLT which Jamie traded last Friday - see Box Trade post. Notice the range contraction (RC) indicator at the bottom of the chart. A low reading on the RC indicator denotes range contraction. A low RC reading almost always involves narrow range bars of some flavor (NRB, NR7, NRIB). Following the low reading coming into Friday, FWLT has had two days of range expansion (upside).
http://3.bp.blogspot.com/_QeS-aqinJjo/SWLm8SKdpdI/AAAAAAAAADs/FQVwwdzxrXQ/s320/FWLT_daily_RC_010509.bmp
The second chart (mystery chart) has a good RC setup for tomorrow. Do you know this stock?
http://1.bp.blogspot.com/_QeS-aqinJjo/SWLozaTXydI/AAAAAAAAAD8/Eo_J8o79EIY/s320/Mystery_daily_RC_010509.bmp
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Posted by Jim at 1/05/2009 11:54:00 PM 7 comments http://www.blogger.com/img/icon18_email.gif
Labels: Box_Play, Daily, Focus_List, NR7, NRB, NRIB
Analyzing the Trades -
http://2.bp.blogspot.com/_LsWQWmRqnWY/SWLJr1SOhXI/AAAAAAAAHaE/dgATTz5Iwk8/s400/anr.pngA reader submitted the following four trades and asked me to analyze NOC and PHM for possible tips on how to pick good setups from mediocre setups in real time. He trades on the 10 minute timeframe, so all the charts are displayed on the 10 as opposed to the usual 15 min.
The best setup, IMO is the BTU because we have IBs, green on green, in the upper half of the ORH with the PDH holding as support, so I would rate this setup as A+.
The only thing I don't like about ANR, is the entry occurs in the R-zone (retracement zone), which is often a consolidation area. I had ANR and ACI as early leaders (outliers) on my watch list, and I decided to go with ACI (break of ORH at the whole $ level). The entry point is a good distance away from the Fib. extension (R-zone) of the PDL to the ORH . ANR had bigger relative volume, but I thought ACI had a better base and higher chance of running given the distance from the R-zone.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWLJrjK2uZI/AAAAAAAAHZ8/xYVhMUI3-60/s400/BTU.pngThe opening range for NOC is very wide, so I would place my Fibs from the ORL to the ORH and extend from there. Price consolidates in the upper third of the OR and breaks out. The entry is good, but shortly after breaking, price stalls. The doji shooting star is a red flag and I would take some money off when price moves below the low of the SS. The trader in question, tightened the intial stop and was stopped out as depicted in the chart below. If the inital stop plus 2 cents had not been tightened, it would have held as support.
The only thing I could add as a secondary strategy, you might want to take half off after a shooting star and leave the balance with the original stop.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWLJrclve5I/AAAAAAAAHZ0/kj_iNBm1BJc/s400/noc.pngThe PHM setup is my least favorite of the four trades. Not only does it execute in the R-zone, but it's also less orderly. However, it does have decidedly more volume on green bars than red, so there's a strong bias towards a continuation long.
If price moves out of the R-zone and immediately reverses back in, it's a red flag - keep it on a tight leash. In this case, PHM carved out a dark cloud cover candle and retraced quite sharply. If you're using intraday pivots, price popped above R2 and couldn't hold it, so time to take some money off to protect capital.
PHM eventually carved out an ascending triangle with a low risk entry and had a nice run.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SWLJq4IsXBI/AAAAAAAAHZs/XOVQajPMN98/s400/PHM.pngIn summary, I would say that the trader had a good day, despite a 50% stop out rate on the morning trades, the winners both reached the 100% Fib. extensions and the stop outs were managed for minor losses. The only caution I would stress is picking spots away from the R-zone unless the setup is otherwise perfect like ANR.
Related Post: Understanding Fibonacci
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Posted by Jamie at 1/05/2009 09:57:00 PM 5 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, Pivot Point, retracement_zone, Support_Resistance
Sunday, January 04, 2009Technical Picture - Inverse H&S
http://1.bp.blogspot.com/_LsWQWmRqnWY/SWGMvEoh6DI/AAAAAAAAHZk/XlMyi7QFOJ8/s400/spx.pngWelcome to 2009. The first trading day got off to a good start if you're a bull. We finally broke out of the inverse head & shoulders pattern we've been talking about over the last month. If the breakout doesn't fail in the coming days, I'm expecting at least 150 point move north from the breakout point.
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Posted by Jamie at 1/04/2009 11:28:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Saturday, January 03, 2009Box Trade - Apple Inc. (Public, NASDAQ:AAPL)
http://3.bp.blogspot.com/_LsWQWmRqnWY/SV74UE5ucTI/AAAAAAAAHZU/rcZtqGfZoF0/s400/aapl.pngA reader asked what is the easiest setup to master. I would have to say that basic chart patterns such as C&H, flags, and H&S along with the box trade are relatively simple setups to execute. I usually look for box trades from my watch list. I look for stocks basing in a narrow range over a period of three days or more. The longer and narrower the box, the more powerful the setup.
AAPL had been basing for 6 days between $84.75 and $88.00. Today it moved out of the R-zone and stair stepped towards the base at $88.00. I usually set an alert inside the base so that I know when to start focusing on the setup. If price moves sharply into the base, it needs to consolidate that move before breaking out, so patience is required to spot the correct entry. AAPL carved out an inside bar (NR7), green on green, which is my favorite for longs.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SV74T5odSOI/AAAAAAAAHZM/eQdHhcCfsSU/s400/fwlt.pngFWLT had developed a box over the minimum three days. It moved sharply towards the base and retraced 50% allowing for a scaling in, ambush setup followed by additional size after it moved back into the base and printed a tight, narrow handle at $24.00 on the 1 minute chart.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SV74TkPCUNI/AAAAAAAAHZE/bfTx-mPkRKE/s400/fwlt1.pngUse Fibonacci as opposed to pivot levels to help plan the exit strategy. The pivot levels are usually tight after a stock has been in a narrow box over several days, so the R2/S2 levels are usually easily taken out.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SV8D1CyRu7I/AAAAAAAAHZc/m-BUNFITx60/s400/celg.pngCELG was a failed C&H pattern. I set my initial stop 2 pennies below the previous (outside) bar low. I eventually tightened the stop as depicted by the red line segment because the setup looked hopeless and I was stopped out. My initial stop would have been been taken out by 1 cent, followed by a reversal and full extension of the measured move of the pattern. Once a pattern fails, it's hard to get back in because you don't trust it anymore.
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Posted by Jamie at 1/03/2009 12:17:00 AM 9 comments http://www.blogger.com/img/icon18_email.gif
Labels: Box_Play, Fibonacci, Inside Bars
Friday, December 26, 2008Scalping the Fives
Too many days off, and too much holiday spending, make me long for some good trading action. I followed the markets all morning without putting on a trade (a good holiday season mode = market observation until you are certain of a good setup). After lunch, I saw several setups sufficient for scalps on the 5 min charts.
Some key points to remember when scalping in lower volume conditions are: 1) Choose a good time-of-day (first hour and afternoon are best), 2) Know the local pivot points (sup/res levels) such as opening range high (ORH) and low (ORL), previous day high (PDH) and low (PDL), Fibonacci levels, etc., 3) Utilize traps or head fakes relative to these local pivot points, and 4) Watch for range contraction (foreshadows range expansion) in the setup.
Chart1: Following range contraction (denoted by converging trendlines), oil services (OIH) broke out and showed some afternoon strength.
http://3.bp.blogspot.com/_QeS-aqinJjo/SVVUX6_8VNI/AAAAAAAAADU/qtpBeJ1ZUGA/s320/OIH_12262008_5m.jpg
Chart 2: Gold was weak in the AM and came roaring back (trap action). ABX consolidated below the ORL and then retook the ORL, ORH and PDH. The bull flag did lead to higher highs but the bulk of the move occurred before the flag.
http://1.bp.blogspot.com/_QeS-aqinJjo/SVVUgXvMAyI/AAAAAAAAADc/NLQzog41ePc/s320/ABX_12262008_5m.jpg
Chart 3: Following some weakness at the open, SRS showed enough mid-day strength to set a decent trap. When price fell through the ORH (failure) in the afternoon, the next consolidation set the stage for a retest of the ORL.
http://3.bp.blogspot.com/_QeS-aqinJjo/SVVUmzi4m3I/AAAAAAAAADk/ZE3tUnOl_BY/s320/SRS_12262008_5m.jpgHappy Holidays!
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Posted by Jim at 12/26/2008 04:45:00 PM 3 comments http://www.blogger.com/img/icon18_email.gif
Labels: Failure, Opening Range, ORH, ORL, Scalp
Friday, December 19, 2008Happy Holidays
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUx1__FG4nI/AAAAAAAAHY8/TDSAtNNSkBc/s400/UBSXmasTree-1.jpg
Merry Christmas, Joyeux Noël, Feliz Navidad
Enjoy the holidays. See you back here in 2009
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Posted by Jamie at 12/19/2008 11:34:00 PM 11 comments http://www.blogger.com/img/icon18_email.gif
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Friday, December 19, 2008Gapper - Research In Motion Limited (USA) (Public, NASDAQ:RIMM)
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUxp1C1TqMI/AAAAAAAAHYk/61t2RWc1wwM/s400/rimm.pngRIMM was an earnings gap on raised guidance. After breaking above the ORH, price stalled and eventually slipped under it, but quickly snapped back, setting a low risk entry long. It moved to the 38% Fib. extension of the previous day low to the ORH and consolidated again. It felt like a stair step extension, but eventually manged to reach the upper end of the R-zone.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUxp02QolpI/AAAAAAAAHYc/leNIoxOwgfA/s400/aem.pngAEM carved out a C&H. The trigger bar was NRIB. Place Fibs. from low of the cup to base of the handle. The target is a measured move of 100%. It was not reached but, I traded both RIMM and AEM in my retirement account as well as my trading account and the AEM TSX extended well beyond 100%. almost tagging the 1.38% level.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUxwLCTxlYI/AAAAAAAAHY0/mEqNqcGIguA/s400/aem1.png
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Posted by Jamie at 12/19/2008 10:41:00 PM 8 comments http://www.blogger.com/img/icon18_email.gif
Labels: Cup-and-Handle, Fibonacci, Gapper, NRIB
Thursday, December 18, 2008Technical Picture - Bears Step Up
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUsjqoz3FSI/AAAAAAAAHYU/dbDxsDUDkaE/s400/spx.pngNarrow range chop and the typical midday drift/consolidation below intraday moving averages gave way to a wave of selling into support of previous day low. This accelerated following the report that S&P had revised its outlook for GE to negative.
The good news is that the VIX closed lower despite the sell-off. Financials GS and MS which reported earlier this week, held up well. After hours RIMM raised guidance but after the initial spike, the reaction was somewhat muted.
Tomorrow is options expiration.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUsjqMIp2WI/AAAAAAAAHYM/epXVS3kL8bs/s400/vix.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUsjglHxMwI/AAAAAAAAHYE/loISNYbwZbA/s400/usd.pngUSD bounced from support carving out a bullish piercing line. It may retrace back to retest broken trendline. If this happens expect weakness in dollar sensitive commodities. POT for example printed a bearish engulfing stick and is due for a retracement following a 30 pt. sprint off the lows.
Energy looks very weak despite OPEC measures to reduce production.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUsjgSG_0rI/AAAAAAAAHX8/70l0oqzBy3A/s400/xle.png
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Posted by Jamie at 12/18/2008 11:25:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Bears Own It
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUr4wEQllaI/AAAAAAAAHXs/HfLqUPVOwEA/s400/BUCY.pngAll of these trades are from my watch list of usual suspects (fixed list of 50 stocks across various sectors). First up I read on Briefing.com that BUCY and JOYG were downgraded. Yesterday, we traded these and they both closed above their 50 DMA for the first time in several months.
I didn't get into JOYG today, but BUCY provided a quick swoon off the open. After filling yesterday's gap, price retested the PDL and failed, setting up another short.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUr4sOKtRqI/AAAAAAAAHXk/FOhra-IVC1Q/s400/abx.pngABX overbought as highlighted in last night's technical post.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUr4n4TVI8I/AAAAAAAAHXc/DKVx9YefjY0/s400/fwlt.pngFWLT gapped up and immediately sold off. I shorted when it took out the 3 pivot point base from yesterday. I placed my Fibs from the ORH to the base and exit at 100%. I re-entered when it couldn't hold the initial reversal base.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUsERrIFTNI/AAAAAAAAHX0/whPN0-8GuUI/s400/nq2.pngThe futures spent most of the morning in a narrow range chop. During lunch the Nasdaq futures carved out three narrow higher closes on declining volume. That's when I knew it was going down.
The spike from 4:00-4:15 is RIMM beating on guidance.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUr4npY1WAI/AAAAAAAAHXU/EBR0t6uXwA4/s400/nq1.png
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Posted by Jamie at 12/18/2008 08:24:00 PM 8 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, Gapper
Wednesday, December 17, 2008Technical Picture - Post Fed Consolidation
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUm-NgRpO5I/AAAAAAAAHXM/UWXCO8ZHrl0/s400/comp.pngThe good news is that we manged to hang on to most of yesterday's gains. The bad news is that technology, which accounts for the largest weighting in the S&P 500 at roughly 15%, finished 1.7% lower. AAPL is in a funk after announcing no Steve Jobs at MAC World and that it must end its exclusive deal with one of France's network operators. The Nasdaq chart above is not very inspiring on the long side because it looks like a rising wedge.
Next two days could be choppy as we head into OPEX.
Economic Calendar: initial claims in pre-market; leading ind. and Philly Fed at 10:00.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUm910LEv4I/AAAAAAAAHXE/b3w_2kfLE0A/s400/cboe.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUm91h7RG3I/AAAAAAAAHW8/Xe06LiJo4M4/s400/vix.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUm91pOeEMI/AAAAAAAAHW0/4GSfl5p9Upk/s400/usd.pngThe USD is getting close to support around 77 and the gold play as depicted by the ABX chart below is just about cooked, for now. Expect profit taking at these levels. Energy is coiling.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUm91g4PaRI/AAAAAAAAHWs/5eQ9TKcnhmk/s400/abx.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUm91AB6JbI/AAAAAAAAHWk/1m5y-n_Q9EI/s400/xle.png
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Posted by Jamie at 12/17/2008 10:03:00 PM 1 comments http://www.blogger.com/img/icon18_email.gif
Potpourri
The TSX was down today due to technical problems and it threw me off. Whenever, I trade Canadian stocks such as gold, energy, agchem, I like to trade both exchanges. So, when TSX was down I got a little anal and missed the gold trades altogether. I managed to snap out of it in time to catch half of the Agchem play.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUl36OKR5fI/AAAAAAAAHWc/CYtR0xhNT_U/s400/pot1.pngPOT was a continuation play from yesterday's gap and extension. With a weaker $USD, gold, commodities have a chance to rally. Price rallied into the R-zone, consolidated, and moved out for one last wave. I drew trendlines on all of my 1 minute charts today because prices were extended after yesterday's 5% jump, and I didn't want to overstay the trades.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUl3oKJ9iqI/AAAAAAAAHWU/NQxXKE7HWUc/s400/pot.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUl3n3CUAQI/AAAAAAAAHWM/kCZurOQbErs/s400/ms.pngFor many stocks with big moves following yesterday's FOMC, it didn't make sense for me to place my Fibs. over yesterday's trading range, because that would give me unrealistic targets.
The MS chart above, carved out a perfect cup & handle pattern. The normal measured move is 100% from the low of the cup to the base of the handle, however, today it stalled after closing above the R-zone and reversed, so I exited the trade.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUl3n0Lx2MI/AAAAAAAAHWE/Y7rYSqfRoVw/s400/joyg1.pngBoth JOYG and BUCY printed really wide opening ranges and here we used Trader-X guideline #4 for best results. This means you place fibs from ORH to ORL. Price consolidated in the R-zone midday and allowed for a low risk entry back up to the ORH, followed by a small extension.
As you can see from the 1 minute chart of JOYG, after taking a partial, price is far away from the trendline. Under normal market conditions, expect some sort of pullback or consolidation when price moves too far, too fast. This happens either through price or through time, or a combination of both like JOYG, which initially moved sideways (time) and then pulled back towards the trendline (price). BUCY consolidated the move more through time as it managed to hold the ORH EOD.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUl3npLlplI/AAAAAAAAHV8/JOMKEml8e-Q/s400/joyg.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUl3nplzdSI/AAAAAAAAHV0/5HfAcfUuawo/s400/BUCY.png
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Posted by Jamie at 12/17/2008 05:01:00 PM 17 comments http://www.blogger.com/img/icon18_email.gif
Labels: Cup-and-Handle, Fibonacci, retracement_zone, Trader-X
Tuesday, December 16, 2008Technical Picture - FED Bounce
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUhjEyUgkhI/AAAAAAAAHVs/kbyeXeNU5QU/s400/spx.pngThe FOMC's decision to slash key lending rates to lowest levels in 50 years and stated commitment to remedy the ailing U.S. economy, bolstered investor optimism and sent stocks sharply higher. Okay, so now maybe we can breakout of this base before Christmas.
The bear market bounce, thus far is a low momentum bounce. Let's see if we can take out last week's highs and move this rally forward.
Earnings trumped weak economic data in the front end of the session with GS losses in check and BBY reaffirming guidance. Narrow range trade noted into midday with typical tight range trade continuing into Fed announcement time.
The FOMC noted that financial markets remain quite strained and credit conditions tight and that the outlook for economic activity has weakened even further. This was their rational for the unprecedented move to target a rate range of 0.00% to 0.25%. The initial reaction was positive and after a pause and retracement, the indices extended the move into the close. The strong advance was across the board with finance pacing the way.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUhe5luO9cI/AAAAAAAAHVk/THj4W0avb2E/s400/usd.pngThe U.S. dollar dropped precipitously after the FOMC cut rates.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUhe5gj3oJI/AAAAAAAAHVc/f3UZ51Udxh0/s400/xau.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUhe5RoDcSI/AAAAAAAAHVU/a4q2E4Pjcv4/s400/xle.pngCrude oil still in a trading range but lower dollar should help. Don't forget crude inventories tomorrow at 10:35.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUhe45i_a1I/AAAAAAAAHVM/hTGNJPAPJ3A/s400/xlf.png
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Posted by Jamie at 12/16/2008 09:05:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Earnings Gap - Goldman Sachs Group, Inc. (Public, NYSE:GS)
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUhQxEoP1-I/AAAAAAAAHU8/7TuXUuJ3jkw/s400/GS.pngGS gaps up on earnings (loss is less than feared). Price breaks the ORH and comes back for a retest in the form of a bullish flag on declining volume.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUhQwvVNHxI/AAAAAAAAHU0/fNEOSD1jcbY/s400/ms.pngMS reports tomorrow, but was a sympathy play with GS.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUhQwZ3NOqI/AAAAAAAAHUs/zQImkcJ6xk4/s400/rimm.pngRIMM formed an inverse H&S pattern which triggered before the FED so I sized it on the light side. The measured move is 100%. Measure distance from point A to B and extend the distance from the BO point. Best to exist into strength, before the exact target is reached. Whole $ numbers are good exist points if they are near the measured move target.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUhRL4bCfAI/AAAAAAAAHVE/RaHC3teVspg/s400/BAC1.pngBAC set up a perfect ambush trade following a 3 pivot point base and break on the FED announcement.
Ambush Trade - look for retracement back to R-zone after a thrusty move. Price holds the 62% level on a closing basis. When price forms a base and moves back out of R-zone, we ambush.
This setup is used extensively by John Carter and co. at TradetheMarkets.com
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Posted by Jamie at 12/16/2008 08:04:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Labels: ambush_zone, Bull_Flag, Fibonacci, Gapper, Head_and_Shoulders
Technical Picture - Consolidation Ahead of FED
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUdH6EXLUFI/AAAAAAAAHUc/BW2ZHEqwLhI/s400/spx.pngStocks sold off in early trade as investors grappled with ongoing uncertainty and the threat of more losses from the financial sector, as well as the latest developments in the Maddoff Ponzi scheme. The fate of the Big Three automakers remains uncertain, even though the White House signaled that a more thorough relief plan for automakers is on the way. Financials -4% made up the session's worst performers, thanks to notable weakness in major banks like JPM and Bank of America (BAC).
Investors also sent shares of GS and MS lower in anticipation of heavy losses from the pair when they report quarterly results Tuesday and Wednesday, respectively. Noticed that Cramer is endlessly harping on blame for poor performance in financials on the back of the SEC and the removal of the short uptick rule and I say he's still a bonehead. Wall St. sold the world a bill of goods with mortgage backed securities and various other questionable schemes, so why shouldn't the shares be at multi-year lows.
November industrial production slipped 0.6%, which was about in-line with expectations, but reflects the underlying weak trend. Such trends have the FOMC fighting to kick-start lending in order to induce economic growth. As such, fed funds futures imply a reduction to the fed funds target rate is certain. There is currently a 66% implied probability the target rate will be cut to 0.25% from 1.00%. There is a 34% implied probability the rate will be cut to 0.5%... The expected drop in interest rates combined with weak economic conditions has currency traders selling off the USD. Dollar weakness helped fuel an early advance in commodities such as agchem, natural gas, gold, and crude oil. Crude was up as much as 8.2% during the session, but came under pressure as the threat of a production cut from OPEC was no longer a surprise. Crude prices already advanced more than 10% last week alone. OPEC meets Wednesday and is expected to cut daily production by 2 million barrels.
Lots of forces at play as we head into tomorrow.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUdH52FVG2I/AAAAAAAAHUU/WUbFlrwHKUQ/s400/usd.png
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Posted by Jamie at 12/16/2008 01:16:00 AM 4 comments http://www.blogger.com/img/icon18_email.gif
Monday, December 15, 2008Bull Flag - Barrick Gold Corp. (Public, TSE:ABX)
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUcF-wxCT2I/AAAAAAAAHUM/OjvEwLQsqN0/s400/abx.pngABX (TSX) formed a bullish flag. Extend Fib. from low of the flag pole to the high of the flag. The target is a measured move of 100%.
A second trade was possible when price retraced back to the ORH, tested but held on a closing basis. The bar by bar shakeout ends with a bullish engulfing, hammer-like stick which foreshadows a retracement. Once price broke above the round $ number, it retraced back to the 50% level.
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Posted by Jamie at 12/15/2008 08:34:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: Bull_Flag, Fibonacci
Sunday, December 14, 2008Technical Update - Bulls Hang On
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUXHS1GhXoI/AAAAAAAAHUE/h6B2G84Fxjs/s400/spx.pngThe markets extended Thursday's slide in opening action on Friday after talks concerning the auto loan package (bailout) broke off in the senate. The pressure dissipated as the S&P 500 held near support at the 38% Fibonacci retracement of the Nov-Dec recovery rally . Helping to stem the slide were reports that Treasury might be willing to use TARP funds for emergency loans for the auto bailout. A slow/choppy advance continued into midday and after an early afternoon breather the indices edged to minor new highs in late trade to end with modest gains. A relatively quieter week in terms of volume and ATR (average trading range) with choppy action leaving the S&P and Dow little changed The Nasdaq outperformed ending +2% for the week led by Semis (SMH) +10%.
A bullish hammer reversal bar on the daily to end the week. A doji on the weekly doesn't resolve last week's hammer/hanging man stick.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUXHSfRDPdI/AAAAAAAAHT8/1_8xYp6etSE/s400/spx+week.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUXHSf7s-QI/AAAAAAAAHT0/c-B8VP-voOQ/s400/spx15.pngFormer support is now resistance on the 15 minute timeframe.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUXHSGZFB5I/AAAAAAAAHTs/mY_sWAjcP2I/s400/cboe.pngThis week is OPEX, so the CBOE put/call ratio will be of interest as the week unfolds. Remember last month we saw put buying accelerate into expirations leading to a breach of multi-year lows.
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Posted by Jamie at 12/14/2008 09:54:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
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Friday, December 12, 2008Gapper Continuation Trade - Amylin Pharmaceuticals, Inc. (Public, NASDAQ:AMLN)
http://2.bp.blogspot.com/_LsWQWmRqnWY/SULcp_aejGI/AAAAAAAAHTk/XVxe_ccZmUY/s400/amln.pngSusan asked about AMLN in the comments yesterday. If you read my response, you'll see why AMLN was on my focus list this morning.
Since this stock is not a gapper, place fibs. using Trader-X guideline # 1. When price breaks out of R-zone, it has a nice thrust to the PDH where I take a partial. Was hoping for a consolidation, followed by an extension, but I got stopped out.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SULcpRgDWyI/AAAAAAAAHTc/Y_P8MtI2b3c/s400/sqnm.pngNot a lot of good setups today because the markets were extremely choppy, but while I was perusing my biotech WL, SQNM caught my eye. The base is somewhat choppy, so I didn't put a lot of money to work here (unfortunately). On the B&B setups I like to place my fib. extension lines from the low to the base. Took a partial at the 50% extension and exit as price approached 100%.
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Posted by Jamie at 12/12/2008 04:47:00 PM 3 comments http://www.blogger.com/img/icon18_email.gif
Labels: Base and Break, Fibonacci, Trader-X
Giant Ponzi Scheme
The manure keeps piling up on Wall St. and it's getting really hard to breath. As if we weren't already knee deep in shit, now even the die hard investors will want to run for the exits. Here we go again, more fund redemptions and a retest of the lows sooner than anticipated.
Madoff says he's been defrauding investors for years to the tune of $50 billion, paying off old investors with the principal from new investors. How can this be? Are these firms not audited?????
Meanwhile, on another planet, CNBC's Screamer aka, Jim Cramer, is still carrying on about the removal of the shorting uptick rule as the death of Wall St. Is Cramer in denial, or is he just simply retarded?
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Posted by Jamie at 12/12/2008 01:37:00 AM 4 comments http://www.blogger.com/img/icon18_email.gif
Thursday, December 11, 2008Technical Update - Gap Fill
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUHf0Gp5aoI/AAAAAAAAHTE/5c89hM1pxII/s400/spx.pngLast night we said that NR7 price/volume contraction implied price expansion, but direction was not clear. Today we had expansion in the form of a gap fill.
Based on how we closed, we had plenty of room between the trendline. However, after hours S&P futures are ripping lower, the trendline is broken. The trendline is approx. 860 and we are now trading at 833. Should be an interesting open.
The senate has rejected the U.S. auto bailout. Harry Reid, the majority leader said, "It's over with, I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUHhneNdppI/AAAAAAAAHTM/Op-8f7zy2n8/s400/ES1.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUHhnqtngEI/AAAAAAAAHTU/bwo0zABA9kM/s400/es.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUHfz2EKscI/AAAAAAAAHS8/wgVRskOSOa0/s400/vix.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUHfzsRhLFI/AAAAAAAAHS0/Cfp6CzR2qRU/s400/usd.pngUSD fell sharply as energy, gold, and commodities rallied on the open. USD is now in a support zone and near the trendline.
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Posted by Jamie at 12/11/2008 10:49:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Chart Patterns - Canadian Natural Resource Ltd (USA) (NYSE:CNQ); NQ Futures
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUHMiB2hNWI/AAAAAAAAHSs/UL_xwhMxb-g/s400/cnq.png$USD weakness is an invitation to long commodities. I went long CNQ.
Long on a break of a inverted H&S bottom. After the measured move of the pattern, CNQ slipped back below R2 and I took a partial for safety.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUHMh3oMQEI/AAAAAAAAHSk/DQEhK_3bKr0/s400/cnq1.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUHMhk9LJdI/AAAAAAAAHSc/IE3lchZRaGI/s400/nq.pngThis morning in the comments of last night's technical update, I said to DT that I'd like to see a gap fill. My wish came true. It set up as a bear flag.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUHMhRuYGzI/AAAAAAAAHSU/RT1uXgZc8cA/s400/nq1.png
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Posted by Jamie at 12/11/2008 09:26:00 PM 6 comments http://www.blogger.com/img/icon18_email.gif
Labels: Bearish_Flag, Head_and_Shoulders
Technical Picture - NR7 - Contraction Ahead of Expansion
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUC3kGS5PLI/AAAAAAAAHSM/W7gI9g1uOiI/s400/spx.pngSPX carved out NRIB (NR7) on lower volume which implies price/volume contraction ahead of expansion. Direction is not clear with the 50 DMA hovering over price. We are overbought. Keep a close eye on the VIX as it tests the lower side of the symmetrical triangle.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUC3c3ryRjI/AAAAAAAAHSE/agwehB3jXtY/s400/namo.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SUC3chJ5HaI/AAAAAAAAHR8/u3l1vHjjxTE/s400/vix.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUC3ctnks8I/AAAAAAAAHR0/ZSlmqJ5s2rY/s400/usd.pngThe $USD has weakened and gold/energy/commodities are bouncing.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SUC3cdrdr8I/AAAAAAAAHRs/n2i0VjM9T-4/s400/xle.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SUC3cKMlEpI/AAAAAAAAHRk/_BdgGQRhU94/s400/xau.png
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Posted by Jamie at 12/11/2008 01:45:00 AM 3 comments http://www.blogger.com/img/icon18_email.gif
Wednesday, December 10, 2008Preview
http://3.bp.blogspot.com/_LsWQWmRqnWY/SUANE7WlN4I/AAAAAAAAHRc/Qnn2snyFtow/s400/fwlt.pngPerfect setup - FWLT (from my WL) formed a bull flag at base of R-zone.
I have personal business to attend so I may not have time to update blog tonight.
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Posted by Jamie at 12/10/2008 01:39:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Labels: Bull_Flag, Fibonacci
Tuesday, December 09, 2008Continuation Plays -
http://2.bp.blogspot.com/_LsWQWmRqnWY/ST8lS9St6cI/AAAAAAAAHRU/8rybeN867zE/s400/agu.pngAGU and POT set up nice continuation plays after yesterday's gap up. I liked AGU because yesterday's daily printed a NRB. Break of PDH (previous day high). Exit after 3 WRBs just about 10 cents away from the Fib. target.
http://4.bp.blogspot.com/_LsWQWmRqnWY/ST8lSbXVlvI/AAAAAAAAHRM/c6_VzvDdWG4/s400/x.pngX gapped into the R-zone and consolidated for about 45 minutes before breaking the ORH. X didn't reach the Fib ext. As noted is last night's technical post, the downsloping 50 DMA is a resistance area on the daily.
http://4.bp.blogspot.com/_LsWQWmRqnWY/ST8lSf0ZUQI/AAAAAAAAHRE/Y1l5gJ5QsSo/s400/nq.pngNASDAQ futures scalping. The blue line base for my long entry was a resistance area midday yesterday. Exit at R1. Shorted a lower high prior to the break of a descending triangle but got stopped out on a breach of the trendline. That turned out to be a head fake and I got back in to finish the job back down to P.
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Posted by Jamie at 12/09/2008 09:10:00 PM 6 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, retracement_zone, Scalp
Monday, December 08, 2008Technical Picture - Follow Through
http://2.bp.blogspot.com/_LsWQWmRqnWY/ST3TONkCqLI/AAAAAAAAHQk/7csHg1croGA/s400/spx.pngThe U.S. markets opened with a gap up following President Elect Obama's comments on Meet the Press regarding big stimulus to get the economy moving again. They got a second boost midday on the news of a bailout for the auto makers. A steep 1.4% drop in the $USD sparked buying interest in commodities . Oil rose 8% to $44.05 per barrel. In the end, the S&P 500 rose 3.8% on volume that was modestly above average. The index has posted a gain in nine of the last 10 sessions and is up 22.8% from its multi-year low reached on Nov. 21. Watch for resistance at the 50 DMA (930) and the round number 950.
Three chip makers came out AH with lowered guidance TXN, BRCM, and ALTR. Futures trading just modestly lower.
http://1.bp.blogspot.com/_LsWQWmRqnWY/ST3TNw2qKGI/AAAAAAAAHQc/RPBsoQhCfk8/s400/vix.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/ST3TNvUw0lI/AAAAAAAAHQU/pjgw_gdn684/s400/usd.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/ST3TNTifULI/AAAAAAAAHQM/AWord7JOD8E/s400/xle.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/ST3TM3fFhOI/AAAAAAAAHQE/fHQKWJ2Q4Oo/s400/xau.png
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Posted by Jamie at 12/08/2008 09:06:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Gap / Fibonacci - Joy Global Inc. (Public, NASDAQ:JOYG)
http://2.bp.blogspot.com/_LsWQWmRqnWY/ST2TH9bzaKI/AAAAAAAAHP8/ZXLRgdCTjtg/s400/joyg1.pngJOYG, from the watch list, gapped up and formed a bull flag at base of ORH. Place fibs. from previous day low to ORH. Took a partial as price approached 50% extension. When that candle completed, it carved out a bearish shooting star so I waited for confirmation and exit the balance.
http://1.bp.blogspot.com/_LsWQWmRqnWY/ST2THTvETGI/AAAAAAAAHP0/VghCQAMjy0E/s400/joyg.pngReference: Trader-X guideline #2
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Posted by Jamie at 12/08/2008 04:31:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci, Gapper, Trader-X
John Lennon - Oct. 9, 1940 - Dec. 8, 1980
Give Peace a Chance - recorded at the Queen Elizabeth Hotel in Montreal in June 1969 at the "Bed-in for Peace".
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Posted by Jamie at 12/08/2008 01:05:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
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Sunday, December 07, 2008Technical Picture - Bulls Comeback Despite Crushing Job Losses
http://1.bp.blogspot.com/_LsWQWmRqnWY/STyMm3MDPcI/AAAAAAAAHPk/qCfjYUT_v8g/s400/spx.pngIBD says we're in a confirmed rally. The last time they said that, the following week carved out lower lows and the markets took a plunge. The basis of their bullishness is that the market demonstrated remarkable resilience in the face of really bad data. IBD says Tuesday was a follow through day and Wednesday/Friday were accumulation days with leading stocks building gains on healthy volume.
I don't quite understand that Tuesday was a follow through day, it looks like a retracement on the S&P 500 chart above. Anyway, on Wednesday, we said that if the market could end the week relatively unscathed after all of the weak data, it was a plus for the bulls and the bear market bounce would be intact.
A close look at the weekly chart shows this week's action carved out either a hammer or a hanging man. Hanging man needs confirmation, so we'll soon find out.
http://4.bp.blogspot.com/_LsWQWmRqnWY/STyMmkebXtI/AAAAAAAAHPc/9FmQym1yxx8/s400/spx+week.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/STyMmswXuMI/AAAAAAAAHPU/mvRqaY8xzsE/s400/vix.pngThe VIX is coiling within the symmetrical triangle. Coiling usually precedes a big move, so we'll be monitoring the VIX closely for direction.
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Posted by Jamie at 12/07/2008 09:11:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Simple Analysis to Understand Fibonacci
The purpose of this post is to review a couple of charts with and without Fibonacci lines so that traders can get a better understanding of the usefulness of Fibonacci as a trading tool.
The first chart is the 15 minute BTU with support/resistance gap openings and congestion zones mapped out.
http://1.bp.blogspot.com/_LsWQWmRqnWY/STxfCl4QfgI/AAAAAAAAHPM/r6us8u4lPP8/s400/BTU2.pngThe second chart is the same BTU chart with the Fibonacci retracement and extensions added. The trade in question was Thursday December 4th. Susan shorted on a break of the coiled spring (price/vol. contraction), partialed at the 50% level and closed at the ORL which lines up with 62% Fib. level. She re-entered after price consolidated at the PDL (previous day low) and exit at the 50% Fib. extension level.
The key take away here is that if the Fibonacci lines are drawn as per Trader-X guidelines (#1) in this setup, the Fibonacci retracement zones (38%-62%) correspond to key S/R, congestion areas. Those are areas where price could typically find support and consolidate or retrace. If you're trading in the retracement zone, you have to manage the trade closely. Once price moves away from the retracement zone, and assuming the setup is good, it is more likely to move to the next level because there's nothing in the way.
Fibonacci lines are a mathematical tool to help traders with entries and exits. It's much easier to map out Fibonacci lines than all of the actual S/R, gaps and congestion zones. The math, which is not my forte, has an uncanny way of lining up with the key spots.
In addition to the guidelines set out by Trader-X, I have a few of my own. Long time readers know that when I trade chart patterns, I like to place Fib. extension lines from the high/low of the pattern to the base. For example on a C&H, I extend from the low of the cup to the base of the handle and target 100% extension. That's based on textbook measured moves of chart patterns.
http://1.bp.blogspot.com/_LsWQWmRqnWY/STxennZwfOI/AAAAAAAAHPE/eS7w9a56q2Y/s400/BTU3.pngThe chart below of ABX (TSX) is a 3 PP base - box play. In this type of setup, I prefer to place my Fib. lines from previous day high to the pivot point base rather than the ORL. Why? Because the base has been forming over several days and is thus more significant than the open.
http://3.bp.blogspot.com/_LsWQWmRqnWY/STxeJCksP-I/AAAAAAAAHO8/-sJDKYXdn7Y/s400/abx-TC.pngHere again I've mapped out the real S/R zones and Fibonacci. They're almost identical. I traded ABX on Friday as depicted below. On the first test of the R-zone, it held as resistance and price moved to the 100% extension. I had planned to short again if and when it broke out of the retracement zone to the downside around 2:30, but that didn't happen and I moved on to something else.
http://4.bp.blogspot.com/_LsWQWmRqnWY/STxeIqvffVI/AAAAAAAAHO0/6wLMtLgEKj0/s400/abx-TC1.png
This post has been selected for Dinosaur Trader's annual Best Stock Market Blog series coming soon!
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Posted by Jamie at 12/07/2008 08:20:00 PM 7 comments http://www.blogger.com/img/icon18_email.gif
Labels: Box_Play, Fibonacci, Fibonacci_retracement, Trader-X
DUG Q&A
http://2.bp.blogspot.com/_LsWQWmRqnWY/STzBhb2alqI/AAAAAAAAHPs/D43Zs_Y15Yc/s400/dug1.pngQ. Thank you Jamie for this excellent post. Very informative for me.
I have a few questions on a double top trade and how you would have traded that. It's DUG (Dec. 5) on a 5 min. chart. It formed a double top around 11.35 at the 50% fib. extension. Would you have traded this ETF based on the chart at around 11.35 (irrespective of how the market was moving). If no, why? If yes, where would you have entered, what would have been your targets at the time of entry.
Also, if the 11.35 candle on the 5 min. chart was a doji or a hanging man - would that have affected your entry point? Any thing that I should remember while taking these setups?
Also, at 10.55, I wanted to draw fib. retracement lines for DUG. I drew from previous day low (from where the leg up started) to the day's high at that time. Is this correct or it should have been the previous day close to the day's high at that point?
A. I would not have taken that trade. I don't really see a double top here, it's much too subtle. The second top is higher than the first and up to that point this stock is on a path of higher highs and higher lows. Volume is higher on green bars than red. More evidence is needed before committing money to this trade.
Just draw your fibs like #2 in the Trader-X guidelines.
Eventually, it forms a bear flag on the retest of the R-zone and you can short it there. I would partial out at ORH and get stopped out, but you can re-enter after the second bear flag breaks below ORH. Use Fib retracement as target. No need to redraw the fibs. in this case.
In my trading, I usually partial at 50 MA on 15 min. as this is usually a support consolidation area.
Also, preference to 15 minute timeframe over 5 min. for newer traders. Candlestick reversal patterns more meaningful on the longer timeframe IMO.
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Posted by Jamie at 12/07/2008 07:40:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci
Thursday, December 04, 2008Today's Trades - Mélange of Setups
http://3.bp.blogspot.com/_LsWQWmRqnWY/STiheU5nUvI/AAAAAAAAHOM/_Ic2xKe8_oI/s400/x1.pngX and CNQ were two B&B setups that I had scoped out last night. I prefer to have a clean setup with an inside bar at the base of the whole $ number, but we have to take what we get and work around it. X breached the base on the OR. The bar was bullish but left a long upper shadow so I had to wait until price could move above the shadow to be sure.
The details are highlighted on the 1 minute chart below. I took a partial on a shooting star and exit on a breach of the H&S top. I was hoping for a possible ambush trade after a 62% retrace of the thrust, but it never panned out.
http://3.bp.blogspot.com/_LsWQWmRqnWY/STihevrGTXI/AAAAAAAAHOU/WEHYFnqZF-M/s400/x.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/STihd7pFKoI/AAAAAAAAHOE/BJkv0tfXCiY/s400/cnq.pngCNQ was my second pick for a B&B trade, but oil/energy was just too weak. After testing the whole $ dollar, it carved out a star on the 1 min. and headed south. I shorted the break of the trendline, took a partial at the 62% extension and was stopped out on balance.
http://4.bp.blogspot.com/_LsWQWmRqnWY/STihdzSmPZI/AAAAAAAAHN8/1FSVB1vf_Qs/s400/nq2.pngThe NQ futures looked like they wanted to stage another rally -bars 4-6 printed 3 consecutive higher closes. After breaching yesterday's high, price consolidated. The shake out bar was soft because it had a long lower shadow. The follow up bar not bearish, so I decided to wait for a trendline break.
On the 1 minute chart below, you can see that I basically scratched that first attempt because I thought it was setting up a head fake. It turned out to be a retest of the trendline. Nevertheless, the follow on was range bound during the lunch time doldrums. After three attempts to break the midday trading range to the upside, NQ carved out 3 consecutive WRBs (with volume) to the lower end of the trading range. This is very bearish. Wait for price to consolidate the move and short.
The chart pattern on the 15 min. is an inverse C&H or a H&S top. Either way, on a measured move basis, the target is 100% from the top of the pattern to the BO point. As you can see from the chart, it executed perfectly.
I went long into the close, after NQ carved out a rounded bottom. Partial as price approaches 50 MA.
http://1.bp.blogspot.com/_LsWQWmRqnWY/STihdWItrEI/AAAAAAAAHN0/ErtFTrRjppY/s400/nq1.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/STi95Tb_2JI/AAAAAAAAHOk/U4gzhvaRhCs/s400/BTU1.png
Susan,
This is how I would place my fibs for BTU. As you noted, the open is within yesterday's trading range, so the retracement lines go from the previous day low to high. Extension from previous day high to low. Nice aggressive entry after 3 inside bars. Another possible entry is at base of retracement zone. I would partial at previous day low because price is going to consolidate or retrace at support. Best to lock some in to be safe.
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Posted by Jamie at 12/04/2008 10:31:00 PM 8 comments http://www.blogger.com/img/icon18_email.gif
Labels: Cup-and-Handle, Fibonacci, Head_and_Shoulders
Wednesday, December 03, 2008Technical Picture - Crawling Back
http://2.bp.blogspot.com/_LsWQWmRqnWY/STdhE99NiII/AAAAAAAAHNk/cR0xbEA10F0/s400/spx.pngA weak open following a dismal ADP report and lower guidance from tech titan RIMM. But once all of the data and bad news was out of the way at 10:00, price moved above the retracement zone and rallied to retest yesterday's highs and eventually extended sharply higher. Prices swooned heading into the FED beige book at 2:00. Once that bad news was out of the way, they rallied back to session highs.
Two consecutive up days following Mondays drubbing. Can we get 3 in a row? Tomorrow's retail sales are sure to be really bad. Will the markets shrug it off like they did today? Friday's jobs data will likely be even worse. If the markets manage to digest all the bad news and close the week relatively unscathed, it will be a positive sign for the bulls.
http://4.bp.blogspot.com/_LsWQWmRqnWY/STdkLoCEqyI/AAAAAAAAHNs/6J1C1GyZl1A/s400/nq.pngToday's futures trades - I missed the front end of the day, but managed a couple of trades in the second half. Futures drifting lower in after hours.
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Posted by Jamie at 12/03/2008 11:44:00 PM 8 comments http://www.blogger.com/img/icon18_email.gif
Ambush Trade - Research In Motion Limited (USA) (Public, NASDAQ:RIMM)
http://2.bp.blogspot.com/_LsWQWmRqnWY/STcjJvKmgsI/AAAAAAAAHNc/4ZiIQdgISdg/s400/rimm.pngAmbush trades are defined as 50-62% retracements after a thrusty move in either direction. This setup is a cash cow over at TradetheMarkets.com. But one thing is for sure, they have much wider stops than I'm willing to risk, so I have to modify the strategy to fit my trading personality. Rather than just jump in if price holds the 62% Fib. retracement level on a closing basis, I'm looking for a tradable base or pattern.
After gapping lower on the open, RIMM produced a thrusty move then retraced into the ambush zone. It carved out a double bottom and once I was satisfied with the setup (trendline break), I went long. Keep a tight stop on this setup because if it fails, it's going to make a fast move in the opposite direction. The preliminary target is a retracement back to the high/low of the thrust, and the secondary target is the Fib. extension. If it struggles to retrace back to level one, then fold.
In case it's not obvious, a thrusty move must have all, or most of the candles in the color of the move - green for long and red for short with big volume. The objective of the setup is to capitalize on the direction of the thrust assuming smart money is behind it.
Amtech noted the following in pre-market: RIMM pre-announced last night, and a miss was expected, only the magnitude was unknown. The subscriber miss is not surprising and firm thinks better than most had feared. Rev guidance suggests handset units were 600k—700K light at about 6.4 mln units. Firm believes a relief rally is probable. From these levels, the gross margin outlook is likely to separate the bulls from the bears. While controversy will not clear in the near-term, firm believes in the secular story and think the stock can provide very significant returns from here. New products came later than expected, but did drive subscriber momentum, and record activations were achieved in the last week of the qtr. Trajectory through the holidays and into the New Year is key for the stock.
My thoughts: Blackberry Storm is getting bad reviews and I believe that if a new product development doesn't work out, it should be scrapped. Don't punish your subscriber base with crap. But since RIM is Canada's only high tech success story, in my heart, I hope Amtech is right.
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Posted by Jamie at 12/03/2008 07:22:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: ambush_zone, Fibonacci_retracement
NRIB (NR7) - Nexen Inc. (USA) (Public, NYSE:NXY)
http://3.bp.blogspot.com/_LsWQWmRqnWY/STcciHRVZcI/AAAAAAAAHNU/i9Kfrf6s6ug/s400/nxy.pngNXY is on my watch list, a Canadian energy play, with extreme volatility lately. Rumor has it that TOT wants to buy NXY and is willing to play a nice premium. Today NXY gapped down after denying the rumors yesterday afternoon. After failing to break below the ORL, it carved out two hammer reversal bars and printed a NRIB (NR7). My first target was former support, now resistance and my secondary target was a gap fill.
The first target was met three bars in. After that, price consolidated inside the WRB and the second target looked attainable as long as the flat 50 MA could be taken out. Unfortunately, the markets pulled back ahead of the FED Beige book and the trade was stopped out. EOD we have a C&H pattern so maybe this one will do something tomorrow.
NRIB = Narrow range inside bar
NR7 = narrowest bar in the last 7 and usually indicates price/volume contraction ahead of expansion.
A bread and butter setup. Preferable to have green inside green for longs and vice versa.
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Posted by Jamie at 12/03/2008 06:50:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: NR7, NRIB
Tuesday, December 02, 2008Technical Picture - Inside Day
http://1.bp.blogspot.com/_LsWQWmRqnWY/STYIOSFDDaI/AAAAAAAAHNE/vMy2zupyuwA/s400/spx.pngThe market started off on a positive note given yesterday's extensive selling, but the entire move off of the lows was on low volume. Prices stalled in the ambush zone (50-62% retracement of yesterday's selling range - ambush strategy used by John Carter and co. at TradetheMarkets.com) and reversed for a sharp pullback. After stabilizing, we got some wave action and managed to close at fresh session highs on bigger volume.
Until prices move above the ambush zone, we are still in an ambiguous posture.
http://2.bp.blogspot.com/_LsWQWmRqnWY/STYLw6baRYI/AAAAAAAAHNM/sQ693uS4XJ4/s400/ES1.pngNasdaq Emini futures trade - took some off when we retraced back to yesterday's late session BO point. Exited balance after price stalled at 62% Fib. retracement and broke the trendline.
http://1.bp.blogspot.com/_LsWQWmRqnWY/STYIONiEEDI/AAAAAAAAHM8/8UlKcMQhgtU/s400/usd.pngThe USD consolidated as did most sectors, so we'll just have to wait and see how things develop.
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Posted by Jamie at 12/02/2008 11:15:00 PM 3 comments http://www.blogger.com/img/icon18_email.gif
Labels: ambush_zone, Fibonacci_retracement
Chart Reading Basics - TWM
Jamie is out nursing a bad tooth and I hope he gets better soon. A small tooth problem can cause major pain.
In the meantime, here is a chart of an UltraShort ETF that I have been following and trading. Jamie and I have concluded there is no leverage advantage to trading many (perhaps most) of the UltraShort ETFs on a risk adjusted basis. However, I find the large range and seemingly amplified volatility allows me to see patterns a bit more clearly, especially on the shorter time frames. I marked the major entry and exit zones. Notice how nicely they line up with key chart points: break down of opening range low (ORL), failure at 50% Fib retracement followed by consolidation, return to the ORL, and finally a volatile afternoon move lower.
http://1.bp.blogspot.com/_QeS-aqinJjo/STX-FI5xThI/AAAAAAAAADM/Ol4LEArQmco/s320/TWM_12022008_5m.jpg
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Posted by Jim at 12/02/2008 10:24:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Labels: Consolidation_Breakout, Fibonacci_retracement, ORL
Monday, December 01, 2008Toothache
http://4.bp.blogspot.com/_LsWQWmRqnWY/STS-e6dyBgI/AAAAAAAAHM0/TRC1pyH9fJ0/s400/toothache.jpg
This is how I feel right now. Waiting for the antibiotics to take effect. Light posting until the swelling and throbbing subside.
A guy with a toothache goes to see his dentist. After examining the tooth, the dentist tells the patient he is going to have to give him an injection for the pain. The patient says, "No way! I don't want an injection." The dentist replies, "OK, I'll give you gas." "Noooo!" shrieks the patient. "I don't want any gas." "Fine," says the dentist, "I'm going to give you some Viagra!" "Viagra?" exclaims the patient. "What for?" To which the dentist replies, "You're going to need something to hang on to when I pull your tooth!"
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Posted by Jamie at 12/01/2008 11:49:00 PM 7 comments http://www.blogger.com/img/icon18_email.gif
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Monday, December 01, 2008Technical Picture - Bears Own It
http://2.bp.blogspot.com/_LsWQWmRqnWY/STS0B0dQ9fI/AAAAAAAAHMs/zKP26EOJfa8/s400/spx.pngYesterday we said that after 5 successive higher closes, we were due for some profit taking. Well that scenario held up until the last hour, when the S&P took out a key support level that had held all last week. The high volume sell-off (fourth largest one day point loss on record for the DOW), broke the neckline on the SPX inverse H&S pattern that was developing. If we can't hold 800 on a closing basis tomorrow, the bears will regain control.
The VIX is forming a symmetrical triangle which is usually a continuation pattern.
Today's sell-off was a reality check given all of the negative economic data - China's growth lower than expected and US in a recession since Dec. 2007. Wow, I thought that last one was already priced in. Keep an eye on all the data this week.
http://2.bp.blogspot.com/_LsWQWmRqnWY/STS0Bbm6wyI/AAAAAAAAHMk/1qRjm8wGrbM/s400/vix.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/STS0Bbfmc5I/AAAAAAAAHMc/l9WXHXupLiM/s400/usd.pngThe USD followed 3 successive lower closes with the exact opposite and 62% retracement. I'm still holding out for a sharper pullback, but I won't go into denial if we retest the highs.
http://1.bp.blogspot.com/_LsWQWmRqnWY/STSzgHe-7zI/AAAAAAAAHMM/Yn8ViNjj-NI/s400/energy.pngEnergy and financials led today's retreat and this chart just a big tease.
http://1.bp.blogspot.com/_LsWQWmRqnWY/STSzfzeLVII/AAAAAAAAHME/UgV7aWiEwQY/s400/gold+d.pngIf the markets do go lower, gold might be a safe haven play after filling last week's gap.
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Posted by Jamie at 12/01/2008 11:01:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
3 Pivot Point, Base & Break - S&P Eminis
http://4.bp.blogspot.com/_LsWQWmRqnWY/STSmnWsswVI/AAAAAAAAHL8/yH6ISXWGtcI/s400/es.png
ES had several pivots into this level early last week. Each successful test strengthened this area as key support. Profit taking usually brings us back to key support. We tested support midday and broke out EOD. I've mapped out the remaining supports going into tomorrow. If all of these fail, last week's bounce will likely be another failed bear market bounce. The last remaining hope will be for a higher low.
http://2.bp.blogspot.com/_LsWQWmRqnWY/STSckGbj__I/AAAAAAAAHLs/Kr6TWIj7TvE/s400/cnq.pngCNQ was a head fake lower, which carved out a bullish morning star reversal pattern. I placed my Fibonacci retracement lines from the last leg down and I was looking for a 50%-62% retracement. Partial at 50% and exit balance at 62%. The downsloping 50 SMA acts as resistance.
http://1.bp.blogspot.com/_LsWQWmRqnWY/STScjxL7b6I/AAAAAAAAHLk/1R7wK_zMCgs/s400/cnq1.png
On the wider timeframe of CNQ (TSX), we see 2 pivots at the former gap down level. Let's see if the third test will hold or set up a shorting opportunity tomorrow.
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Posted by Jamie at 12/01/2008 09:23:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Labels: 3 PP Base, Fibonacci_retracement, Morning_Star, Support_Resistance
Sunday, November 30, 2008Technical Picture - Overbought
http://2.bp.blogspot.com/_LsWQWmRqnWY/STNR7FP8r8I/AAAAAAAAHLc/En3lWKCJIt0/s400/spx.pngAll of the major averages jumped 11% or more on the week, but according to IBD we haven't had a high volume follow-through day. That's likely due to the holiday shortened week, but this is a bear market correction. Expect some profit taking early next week. Futures are trading lower at this hour and Asian markets are seeing some profit taking.
http://1.bp.blogspot.com/_LsWQWmRqnWY/STNR62NsQ4I/AAAAAAAAHLU/Mor6EuyyrVI/s400/usd.png
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Posted by Jamie at 11/30/2008 09:53:00 PM 3 comments http://www.blogger.com/img/icon18_email.gif
Base & Break Trades
Wednesday' Trades - Both LRCX and SOHU set up low risk entries on test of previous day high. SOHU was a late entry off of NR7
http://3.bp.blogspot.com/_LsWQWmRqnWY/STLpN7DXfvI/AAAAAAAAHLM/Fh5y8FXrGNg/s400/LRCX.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/STLpNu4dW1I/AAAAAAAAHLE/gRHZupYLpF4/s400/sohu.pngFriday's Trades were on the TSX (open for regular trading hours) - Two bank stocks set up Base & Break entries after 3 prior pivots into the base.
http://3.bp.blogspot.com/_LsWQWmRqnWY/STLpNEWeOyI/AAAAAAAAHK8/GHVlTy0W8Hw/s400/TD-TC.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/STLpMspzwVI/AAAAAAAAHK0/PkAcqfu-6O8/s400/RY-TC.png
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Posted by Jamie at 11/30/2008 02:23:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: 3 PP Base, Base and Break, NR7, NRIB
Thursday, November 27, 2008Technical Picture - Tech Stocks Lead Thanksgiving Rally
http://3.bp.blogspot.com/_LsWQWmRqnWY/SS9Uc4M2yQI/AAAAAAAAHKs/_0NKA05rds0/s400/comp.pngWeaker data in pre-market (Durable Orders -6.2% vs. consensus of -2.5%; Initial Claims 4 wk avg reaches highest level since 1983) resulted in a cautious open but the pressure was short lived as the markets held above Wednesday's low/afternoon range floor during the early dip implying limited pressure. Strength in technology/semi provided initial upside leadership and commodities, energy followed. An afternoon bounce in financials helped the S&P extend its gains for a 4th consecutive higher close.
Equities close at 1:00 PM EST tomorrow.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SS9HOM8W1DI/AAAAAAAAHKk/ZDsOHS7wCrQ/s400/namo.pngFrom oversold to overbought in just one week. Expect some consolidation soon.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SS9HN9aRuaI/AAAAAAAAHKc/1_09YkuI_AE/s400/spx.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SS9HNzPgYWI/AAAAAAAAHKU/eRrmWzSKZno/s400/vix.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SS9HNmVhceI/AAAAAAAAHKM/kLNIefnFqiU/s400/sox.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SS9HNnKw65I/AAAAAAAAHKE/IDmo5mwIFck/s400/financ.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SS9G5XOo10I/AAAAAAAAHJ8/rJBDy6jeaVw/s400/usd.png$USD consolidates after 3 consecutive lower closes. Need to see some follow through (a close below Tuesday's close to confirm the retracement).
http://1.bp.blogspot.com/_LsWQWmRqnWY/SS9G5Bt7t5I/AAAAAAAAHJ0/m6WY69pYqwI/s400/gold+d.pngGold looks ready to move higher after 3 consolidation days. Oil is on fire. Have been day trading some Canadian energy names in the retirement account. My favorites are CNQ, ECA, NXY, SU, TLM. Failures lead to fast moves in the opposite direction and energy is a perfect example.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SS9GuYiJAGI/AAAAAAAAHJs/BgKi6r49mYI/s400/energy.png
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Posted by Jamie at 11/27/2008 07:33:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: NASDAQ
Wednesday, November 26, 2008Happy Thanksgiving
http://3.bp.blogspot.com/_LsWQWmRqnWY/SS3NiVGu-yI/AAAAAAAAHJk/pjzMpdH8bVY/s400/thanks.gifHope everyone was in on the Thanksgiving Rally!
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Posted by Jamie at 11/26/2008 05:27:00 PM 4 comments http://www.blogger.com/img/icon18_email.gif
Tuesday, November 25, 2008Technical Picture - Consolidation Day
http://4.bp.blogspot.com/_LsWQWmRqnWY/SSzA3BTJuFI/AAAAAAAAHJU/GK7vqsxp1kg/s400/spx.pngAfter two strong up days, the markets consolidated in the very upper range of the bounce. The early extension following the Paulson announcement of more FED action, left the S&P up about 17% off Friday's low and near resistance at the 50% retrace of the Nov slump and just below the 20 DMA, so it wasn't surprising to see some corrective action develop.
Another Obama press conference, (totally unnecessary IMO - those types of appointments - today's, not yesterday's - should be published in the papers. Press conf. implies that you have something important to say.) left the markets in a slow, choppy, limited drift. A mild last hour rebound allowed the S&P to close higher for the third session in a row (first time since Mid-Sept). The Dow also ended higher for the third day in a row but the two day win streak in the Nasdaq was broken amid weakness in Semi SMH -4%, Software -3%, Computer-Hardware -3%. But limited damage all the same.
Financial future & options close early tomorrow for the Thanksgiving Day holiday (13:00 ET). Not sure about equities/bonds.
Economic Calendar: durable orders, initial claims personal income/spending at 8:30; Chicago PMI at 9:45; Michigan sentiment and new home sales at 10:00 EST.
Hearing that there's another Obama press conference scheduled for tomorrow morning.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SSzA2wEh0hI/AAAAAAAAHJM/6fv3uUYvMkA/s400/vix.pngVIX continues to cool towards lower levels and the MACD crossover confirms the price action.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SSzA2pP2IaI/AAAAAAAAHJE/9ntCpEqi_14/s400/usd.png$USD continues to weaken and should pause for a breath at the 38% retracement of the last leg up. Gold and energy consolidated.
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Posted by Jamie at 11/25/2008 10:06:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Gap Fade - Morgan Stanley (Public, NYSE:MS)
http://3.bp.blogspot.com/_LsWQWmRqnWY/SSyVGHKQVpI/AAAAAAAAHI0/P_OFJLUuvi8/s400/MS2.pngSort the WL on % change and focus on the outliers. MS was in one of the top spots for the second day in row. This time, it got a little ahead of itself and set up an easy fade. The first chart is the 1 minute and the second is the 3 minute. The 3 min. has the intraday pivot lines , as well as the the previous day high/lows mapped out. The picture is crystal clear with all those tweezer tops at R2 off the open. Wait for the gap to consolidate and then short. The preliminary target was the previous day high, followed by a complete gap fill. The first target was reached easily, but the second didn't pan out. Once price failed to hold the trendline, we sort of fell into a trading range.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SSyVF2q3HKI/AAAAAAAAHIs/VSRzELUNNnM/s400/MS3.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SSyVFtdWT6I/AAAAAAAAHIk/zsJ2Kfq0RU0/s400/cnq1.pngAfter CNQ tested and held its new trendline on the 15 minute, it carved out an inverse H&S pattern on the 1 minute. Price made a vertical move into resistance (prelim. target). I expected that it would consolidate and notch a leg higher, but it just came crashing back down , so I had to scramble to get out.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SSyVFmKH55I/AAAAAAAAHIc/37obstw9TwY/s400/cnq.png
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Posted by Jamie at 11/25/2008 07:01:00 PM 7 comments http://www.blogger.com/img/icon18_email.gif
Labels: Gap_Fade, Head_and_Shoulders, Trendline
Monday, November 24, 2008Technical Picture - Bear Market Bounce In Play
http://1.bp.blogspot.com/_LsWQWmRqnWY/SStDxMRL7AI/AAAAAAAAHIU/cTkYqOrT0mQ/s400/spx.pngYesterday, we said we needed some follow through, more than on Nov. 13-14, to shake out the bears and begin a real Bear market rally. Today's action was perfect as we opened strong and rallied, holding former resistance into the close. The VIX finally broke out of the bearish flag pattern and looks poised to move lower.
The CBOE shows higher levels of open interest.
Economic Calendar: Chain deflator, prelim. GDP at 8:30 EST and Consumer confidence at 10:00. Not sure, but Obama might have another press conference tomorrow.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SStDw7WxMGI/AAAAAAAAHIM/qgdL00g5Ors/s400/vix.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SStDw3PVcMI/AAAAAAAAHIE/M8hrUpwJorU/s400/cboe.png
http://1.bp.blogspot.com/_LsWQWmRqnWY/SStDe5C4orI/AAAAAAAAHH8/63BY7QO5GNs/s400/usd.pngFriday's hanging man foreshadowed a pullback in the USD and it followed through with a sharp pullback today. The $CAD had a nice thrust moving out of a double bottom.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SStDekJb9pI/AAAAAAAAHH0/68LCJ76Cf20/s400/cdw.png
http://3.bp.blogspot.com/_LsWQWmRqnWY/SStDeatEjeI/AAAAAAAAHHs/B6trMmBuJEY/s400/xle.png$USD weakness helped propel energy higher as anticipated.
Gold paused after tagging the downsloping 20 MA. Expect some consolidation at the resistance point.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SStDeE7yvPI/AAAAAAAAHHk/QD20qcUaGfE/s400/gold+d.png
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Posted by Jamie at 11/24/2008 07:13:00 PM 5 comments http://www.blogger.com/img/icon18_email.gif
Gapper (Bull Flag) - Morgan Stanley (Public, NYSE:MS)
http://3.bp.blogspot.com/_LsWQWmRqnWY/SSsg2EGJLaI/AAAAAAAAHHc/SiaUiqkBWEI/s400/ms1.pngSort the watch list on % change. The early leaders are financials and solar. I really liked the strong OR on MS. Price consolidated the gap in a narrow range. As you can see from the 1 minute chart below, the setup was quite similar to ABX on Friday. The Gap plus the early strength carves out a flag pole, the orderly consolidation prints a flag and that sets up the entry.
I took a partial at the 50% Fib. extension of the previous day low to the ORH (15 min.). After testing the $13.50 level, price printed a bearish shooting star and I folded.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SSsg18lpUGI/AAAAAAAAHHU/yLzu0FmlHNc/s400/ms.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SSsg1scCdBI/AAAAAAAAHHM/587-nYB2RlE/s400/RY.pngTraded a couple of Canadian financial stocks in the retirement account. Both RY and TD setup C&H like patterns. Neither extended to the full 100% measured move, but they were orderly and easy to manage. I took a partial on RY when it stalled near the 5 DMA and exited the balance when price approached the round $ number. TD was very slow with no volume, so I was happy with 38%.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SSsg1jtw9dI/AAAAAAAAHHE/bNprnAdiBi8/s400/TD.png
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Posted by Jamie at 11/24/2008 04:43:00 PM 7 comments http://www.blogger.com/img/icon18_email.gif
Labels: Bull_Flag, Cup-and-Handle, Fibonacci, Gapper
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Sunday, November 23, 2008Technical Picture - Technical Bounce Coming Soon
http://3.bp.blogspot.com/_LsWQWmRqnWY/SSm_gCCfoiI/AAAAAAAAHG8/q6CvXwmZ1y8/s400/spxweek.pngThursday night we said that the S&P needed to close the week above the 2002 lows. That was accomplished with a psychologically significant close on 800, well above the threshold 2002 lows, and a 60 pt. move from intraday lows. The strong, late session rally was attributed to reports of Obama treasury pick, Tim Geithner. Still, with more announcements set for tomorrow and reports of possible tax hike deferrals, we could see some confidence building as Obama and the new team take center stage over the Bush debacle.
We need follow through , more than we got on the Nov. 13-14 bounce to temporarily knock down the bears and begin a real bear market bounce (multi week correction). As you can see from the charts below, for the most part, we see some positive divergence creeping in which suggests a correction is coming very soon.
Economic Calendar: Existing Home Sales at 10:00 EST
http://1.bp.blogspot.com/_LsWQWmRqnWY/SSm-VYVEBlI/AAAAAAAAHGk/dFIqqM_10CM/s400/vix.pngThe VIX still looks like it wants to break down from this extended flag pattern.
http://3.bp.blogspot.com/_LsWQWmRqnWY/SSm9IEhv4PI/AAAAAAAAHGc/Y7ea__xqb5g/s400/sox.pngThe SOX looks like it wants to start to retrace here as we see positive divergence of the MACD to lower prices.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SSm9Gtw49lI/AAAAAAAAHGU/bsIszhro3aM/s400/xle.pngEnergy snapped back sharply on Friday, hinting of a false BO. As noted in previous post, Gold did not break Oct. lows and was up sharply on Friday. So we wait patiently for the $USD to soften so that energy/commodities can put together a retracement back up to the top of recent trading range.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SSm6MFnACjI/AAAAAAAAHGE/qoWJLsdoiAI/s400/usd.png$USD has been basing at resistance following a bullish pennant BO. As noted previously, the pennant BO is unconfirmed by MACD which makes it suspect. We now see a hanging man and await confirmation of a pullback.
http://2.bp.blogspot.com/_LsWQWmRqnWY/SSm6LmnM5WI/AAAAAAAAHF8/24qcQpwWilA/s400/CAD.pngThe $CAD has carved out a double bottom and looks poised to bounce - positive divergence of the RSI to equal prices.
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Posted by Jamie at 11/23/2008 03:13:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Friday, November 21, 20083 Pivots - Base & Break - Barrick Gold Corporation (USA) (Public, NYSE:ABX)
http://3.bp.blogspot.com/_LsWQWmRqnWY/SSdiVbEs8gI/AAAAAAAAHFk/RyKf_tD2aJY/s400/abx.pngGold is the only sector I track which had manged to hold above the Oct. lows after yesterday's market drubbing. Today it was strong out of the gate, probably as safe haven as more fear comes into the broad markets.
ABX gapped up on the open above the 5 DMA (orange) and into the 3 pivot base at resistance. I drilled down for a close look at the 1 minute timeframe as price developed a bullish pennant setting up a a low risk long entry. I milked this one all day with a second entry in the afternoon following a shallow pullback and a mini base.
I sort my watchlist on % change and focus on the outliers. Not too interested in shorting at this point except financials. ABX and AEM were number 1 and 2 respectively. AEM is not performing since the dilution announcement earlier this week and can be replaced with any number of other gold stocks. I like GG.
Place the Fibonacci extension from the previous day low to the ORH.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SSdiVJbzG3I/AAAAAAAAHFc/rrAaNQwhl_0/s400/abx1.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SSdt2gXwWMI/AAAAAAAAHF0/45rKCrKyumI/s400/abxd.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SSdtLjAkfNI/AAAAAAAAHFs/ruOD_5lStwA/s400/xau.png
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Posted by Jamie at 11/21/2008 08:26:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: 3 PP Base, 5DMA, Base and Break, Bull_Flag, Fibonacci
Thursday, November 20, 2008Technical Picture - Technical Bounce Needed
http://3.bp.blogspot.com/_LsWQWmRqnWY/SSYqopG448I/AAAAAAAAHFU/MX21bKFuRWY/s400/vix.png
http://4.bp.blogspot.com/_LsWQWmRqnWY/SSYm2JvjRoI/AAAAAAAAHFM/z2ZxV5jscco/s400/spx.pngA retest of former support, followed by a high volume sell-off. If we keep it up at this pace, the S&P will all but disappear by Christmas.
http://4.bp.blogspot.com/_LsWQWmRqnWY/SSYm1_lIS8I/AAAAAAAAHFE/HiqXZR2BtTU/s400/INDU+week1.png
http://2.bp.blogspot.com/_LsWQWmRqnWY/SSYm1l-z4wI/AAAAAAAAHE8/3wnS_Dh5HEc/s400/spx+week.pngThe S&P needs to close the week above the blue line (2002 lows). We desperately need a technical bounce because we've completed a double top formation. The fib. extension of the double top is not pretty and it definitely looks like a depression as opposed to a recession. So hopefully when the DOW tests its 2002 lows (7197) and it looks like it will tomorrow, we'll get the mother of all bear market bounces.
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Posted by Jamie at 11/20/2008 10:09:00 PM 0 comments http://www.blogger.com/img/icon18_email.gif
Support & Resistance
http://2.bp.blogspot.com/_LsWQWmRqnWY/SSYKDskHFoI/AAAAAAAAHE0/ngOGB7fTRDU/s400/LRCX.pngThe $SOX got a pop in early trade, a technical bounce. INTC and LCRX are the only semis in my WL and LCRX had a much nicer chart. Place the fib. retracement lines from yesterday's high to the ORL for stocks that gap. The trigger bar is a NRIB at the base of the 38% retracement level. I took a partial at $16.50 and exited the balance at the full retracement.
http://1.bp.blogspot.com/_LsWQWmRqnWY/SSYKDhEiSbI/AAAAAAAAHEs/31JDAxHjpow/s400/es.pngLast Thursday's low (blue line) did not hold as support as noted in last night's technical post. That broken support level now becomes resistance. The S&P futures rallied to that level in the morning, carved out a combined tweezer top-shooting star reversal pattern (very bearish), setting up a short. Prices swooned all afternoon extending to the 50% level from the ORL.
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Posted by Jamie at 11/20/2008 08:07:00 PM 2 comments http://www.blogger.com/img/icon18_email.gif
Labels: Fibonacci_retracement, NRIB, Support_Resistance