Technical Picture - Nasdaq Weakness Weighs on Broader Markets

For the second day in a row, the markets gapped down on fear regarding potential eurozone defaults. The SPY and DIA were able to fill their opening gaps during the course of the session, but the Qs didn't confirm, leaving the door open for weakness into the close.

As we can see from the S&P emini futures chart above, we had a rounded top form on China tightening and now we have a lower high, also with a rounding effect from eurozone debt default and Nth/Sth Korea. Rounded tops are bearish signifying over supply. Every time the bulls try to push higher, they are met with an unending supply of sellers. Hence, the market has no choice but to continue correcting until the supply/demand re-balances.

I shorted NQ futures in to close as depicted below. Covered half after 10 points, and holding overnight or stop 2125.

NASDAQ monthly chart below, ends the month with a spinning top, which usually leads to near-term weakness.

$USD is approaching resistance at 50% retracment level. It's too strong now. Any pause will likely be relatively shallow and short in duration.

The GLD/Euro decoupling is still in play. GLD and Silver mining and retail provided leadership in today's session.

TLT bottomed, formed a base and is now retracing.

OIL looking weak after today's shakeout bar.

Internet sector forming bearish flag. Not surprisingly, we'll continue to see profit taking in this overbought sector. SOHU broke out of bear flag today. GOOG weakness on Groupon deal. Look for BIDU, AMZN, AAPL to follow.

AMZN ready to fall into gap support.

SNDK flagging at resistance.


Other stocks to watch tomorrow FFIV NR7, GMCR failed BO.

Today's trades - Long RIMM ABX on the open in my Canadian account. My TWS platform had issues so these were missed trades in the trading account. Short TTM and NQ futures.

Technical Picture - Minor Losses

Equities were weak in early trade as the European debt situation and instability in Korean peninsula stoked the fear index. However, stocks staged a late session rally following the open market operations which allowed dealers to unload some $9 billion in treasuries. Leadership was provided by Oil, metals, and financials. Laggards included solar, retail and biotechs.

E-mini futures have weakened and given back most of the late day gains as I write this post.

Looking forward to tomorrow, the last day of the month...will we close above 1200?

The percentage of stocks trading above their 5o MA has deteriorated 30% since peaking in October.

The Euro has retraced 50% of the June-Oct. rally in a relatively short period of time. Now I expect a small bounce back up to retest the broken trendline, however, the European debt crisis is far from over.
GLD and the Euro were fairly well in sync since Sept., but now we see a decoupling taking shape. This should be followed closely as it will impact the H&S top we've been watching develop on the GLD chart.

The best trade today was AMRN in pre-market. As I tweeted in pre-market, Amarin's AMR101 meets pivotal phase 3 study endpoints with highly statistically significant reductions in triglycerides and we had strong pre-mrkt volume.

I added to the position after it broke out of the handle. I exit when the price bars failed to turn red on a higher high, implying relative strength was abating.

The late day rally was a low volatility breakout after an extended period of choppy trade amid really low volume. I missed the actual BO because I was busy trying not to nod off during the snooze fest. Went long as the flag broke and took it to the full extension.

Day Trades from Watchlist - SNDK EXPD

I highlighted the SNDK and EXPD setups in Sunday's post. For SNDK, both of the targeted levels were attained in very short order.

I didn't trade SNDK on Monday or Tuesday because of the large gap. Finally, yesterday I decided to enter on the break of the ORH, otherwise I was going to miss the entire move altogether. As depicted on the 5 minute chart below, SNDK gapped open and held the PDH as support. Enter long on break of ORH. Exit half when the $45.00 target is reached. SNDK consolidated briefly and ripped another half point. The long upper shadow as SNDK tags $45.60 and pulls back, signals the end of the move.

EXPD gapped and sprinted to daily baseline in the OR, signaling that it was finally ready to BO of the daily base. Enter long as price breaks $52.00. I was targeting $53.50 based on long term resistance, but is stalled about 10 cents shy and it was time to get out as the move was very extended.

Add BIDU to the WL. As you can see from the daily chart below, we have a base forming at $109.50. Yesterday's bar is NR7 (price/volume contraction ahead of expansion). Since testing support last week, we have carved out a higher low and BIDU is forming a mini ascending triangle base. Target is daily resistance at $115.00.

The 15 minute chart shows how clean the underlying base is.

Technical Picture - Bulls Defend Support

A modestly weak open was quickly bought to fill the opening gap. Despite strength in tech, the broader markets couldn't find any momentum because the $USD gained strength causing commodity prices to weaken. After the 10:00 turn, prices fell and printed lower lows. They tried to consolidate at Thursday/Friday lows, but failed as prices swooned to a partial gap fill at support from Wednesday's base.

The partial gap fill signaled a long entry on positive divergence of the RSI to lower prices as depicted on the 1 minute timeframe below.

The rally off the lows was slow at first, but managed to retrace most of the day's range by EOD.

As you can see from the 15 minute chart above, we have strong resistance at $120.65 if we manage further gains tomorrow. That level held as support on a few tests last week, and will difficult to break through unless we have a catalyst. If GDP data provide an upside surprise, we could see higher prices ahead of FOMC minutes tomorrow afternoon. Otherwise, I would expect narrow range trade.

$USD and GLD are developing as planned.

Today's trades include AMZN which expanded after Friday's NRIB NR7 on the daily. Why can you take this trade on the open? The base at $165.00 is solid as it was tagged three times over the course of two previous sessions. If price breaks out, it will retest the base before failing, giving buyers a chance to scratch the trade, if it looks like a failed BO.

NTAP tested support on the open and bounced. No follow through in the afternoon.

FFIV - shallow retracement and held in upper range as markets corrected. A good long opportunity and daily BO at $128.00.

Back to my beloved Habs. We're up 2-0 against the Flyers, midway through the 2nd period.

Technical Picture - Markets Pare Back Losses to End Week Even

Equities continued to correct into mid-week and rallied on the GM IPO Thursday in a somewhat contrived fashion. Thursday was an accumulation day, but we need to see a follow through day next week in order to presume the correction is over. Expecting volume to be light ahead of the Thanksgiving holiday. Black Friday will be all important to confirm that the run on retailers will continue. Specialty retailers have bullish charts including COH, CROX, TIF, SBUX, ANF...

Keep an eye on the economic calendar as we have GDP and FOMC minutes on Tuesday and lots of data, including jobless claims, on Wednesday. Thursday is Thanksgiving holiday and Friday is a half day session.

The $USD is retracing in a tight, orderly fashion after ripping to the upper side of the channel. We have solid support, and I expect it to attempt to BO of the channel soon.

GLD is playing out exactly as planned, with very light volume, so far, on the right shoulder. I expect this to be a near-term top and a break of the H&S top will bring prices back to the longer-term trendline.

In my last post, I said that AMZN would bounce from key support at $157.00. It did, and we had a nice swing long back to the 50% Fib. retracement $165.00. Not sure, if it will move much higher before Black Friday. Anyway, my swing is complete, but I will be watching for any day trades that may develop.

CRM had a beautiful earnings gap on Friday. My day trade is depicted below. Since it closed on its highs, I expect follow through to the 62-100% Fib. ext. tomorrow.

SNDK Fib. retracement long. This one took a long time to get going, but held above the stop (red line) and reached the targets.

Continued strength in semis could see SNDK finally breakout of this trading zone.

NTAP looks poised for a retest of Wednesday's lows following the pre-release of its earnings and guidance during regular trading hours. I had just knifed long NTAP when it was halted. Hate when that happens. Turned out okay as the stock traded higher when it re-opened.

But after two days of narrow range meandering, it could break support, and go for a retest, which will likely be a fast move lower - see support/resistance lines on chart below. If Wednesday's lows don't hold, it will go to $47.00, as depicted on the daily.

EXPD looks poised to BO this week.

MCP looks good for a retracement trade. Formed a nice C&H on th lower timeframe Friday and extended perfectly.

On a personal note, I had minor surgery last Tuesday and I am just now, starting to feel like myself again. That explains the lack on posts last week.

Technical Picture - Bears in Control

As you can see from the 15 minute timeframe of the SPY above, the bears are in control, keeping the bulls in check and not allowing price to break above the trendline, which has been in play since the sell-off began.

After hours, prices continued lower to ES 1188.50, currently tracking at 1194. I got a buy signal around 9:30 PM - positive divergence of RSI to lower prices, so I am long overnight using the trendline as my stop.

An oversold bounce is very likely tomorrow, but don't expect the rally to resume anytime soon. We've had institutional selling in many of the tech momo names and that money isn't coming back until prices correct at least 10%.

Talked about AMZN on the stream Friday. Narrow, bottom range trade Friday afternoon led me to suspect further selling despite the daily 20 EMA.

Shorted on breach of Friday's low. Took a partial at the 62% FE of the previous day's range. Stopped out on balance midday, but got back in for the swoon into the close.

If price has a memory, and I believe it does, $157.00 support, should see an oversold bounce.

As we can from the monthly timeframe below, the AB - CD move is complete. The impulse move from A to B retraced 78% to point C and then extended almost 100% to point D. It was a sweet ride, but now it's over.

Someone asked me to do chart analyses of AMZN, AAPL, GS, and MS. This is AMZN and I'll do the rest when I have more time. The only chart among them with short-term potential on the long side is GS.

P.S. Taking Tuesday off. ES trade stopped out for a small gain.