Technical Picture - Modest Gains on Higher Volume to End the Month

Markets opened somewhat mixed, with the DOW outperforming on the strength of solid earnings from CAT and MRK, whereas the NASDAQ lagged following disappointing reports from RIMM and MSFT. Still, we managed to close positive across the board on higher volume. Leaders included solars, semis, coal, GLD, MOO, airlines and energy. Biotechs saw profit taking after an extended run.

Some of the companies reporting earnings the week of May 2nd-6th: Monday: ACV, AB, CPO, DISH, SATS, JKS, APC, DVA, DNDN, FMC, FST, HOLX, and NETL Tuesday: ANR, ADM, AVP, BZH, BYD, BPI, CLX, CTSH, INCY, LM, MA, PCS, MYL, OSG, CBS, CEPH, CRL, CMCSA, DENN, GNW, KNXA, MAKO, OPEN, VCLK, WWWW, and AUY. Wednesday: ASCA, AOL, CLH, GRMN, HNT, K, GAS, NUS, OIIM, PCG, SLGN, BEBE, CMO, CECO, CLWR, ERTS, GG, GDP, IPI, LEAP, PRU, SMSI, TSLA, and WFMI. Thursday: CVC, CBOE, DTV, RAIL, GM, MINI, MNTA, OWW, PXP, RDN, SHOO, TBL, THS, VNDA, VC, WNR, JOBS, NILE, CQB, DEPO, FLR, HANS, KOG, JCOM, KFT, LLNW, PWER, PCLN, RNWK, V, WBMD, and WMGI. Friday: CAS, DSX, ZEUS, PNM, UPL, WTW, and WCG.

The $USD is in a free fall versus GLD and SLV which are parabolic. We should get a technical oversold bounce in the $USD any day now. This is not likely a bottom because there's no positive divergence to indicate an imminent reversal.


By the same token, GLD is due for an overbought technical correction, similar to what we saw in SLV early last week.


Last week's correction in SLV provides us a preliminary support level.

Coal is breaking out of a tight congestion area.

Day Trades

OXY - HCPG pick - favorable earnings was the catalyst for this high volume extension. I waited for a NRB before jumping in.

DRIV - A narrow range coil triggers the short entry. Came within 5 cents of a stop out, but by EOD, my target was reached.


RIMM was a gap down on earnings warning. After the opening range, price couldn't move beyond the 50% Fib. retracement level and eventually broke the trendline for a low risk short.

I covered half when I saw some real size on the bid side at the $48.50 level.


AMRN printed NR7 on Friday. Watch for price expansion.

Technical Picture - Modest Gains

A slightly weaker open following higher than expected initial claims (429k vs. 390k). We chopped in a narrow range for most of the session, but managed new recovery closing highs by EOD. Next short-term target is 1362.

Stocks in play for tomorrow - RIMM - Q1 earnings warning - big gap down. CAT earnings in pre-market. Since Caterpillar last reported, the stock has gained 17.5% versus the S&P 500, which is 4.8% higher. Also, since CAT last reported, it purchased Bucyrus (previously BUCY).

Biotech/Pharma ETF IBB has been one of the best performing sectors since the March correction as depicted on the chart above.

AMGN rebounded strong this week after last Friday's earnings sell-off. Now ESRX, a pharma related name, is doing the same following earnings weakness on Monday evening.

AMRN another Biotech, set up a sweet dip buy as depicted below. Also setting up a C&H pattern for tomorrow.

Two trades in AMRN. 1. Long bullish rounded bottom; and 2. Re-enter long when price corrects back to its trendline as depicted on 1 min. chart below.

Technical Picture - Nasdaq Clears Resistance on Strong Tech Earnings

As we can see from the chart above, the NASDAQ took out preliminary resistance at 2800 on the strength of tech earnings from AAPL, FFIV, and QCOM. Volume was lighter likely due to the holiday shortened week. Hopefully, we can hold 2800 as support next week, however, semi names reporting Thursday night were mostly down (SNDK, CY, RMBS...).

S&P closed just shy of resistance as depicted on the chart below. Now we have a perfect inverse H&S pattern. On a measured move basis, a successful BO target would add 90 points to SPX 1430.

On the SPY chart below we highlight the gap support area. Some backing and filling prior to BO would come as no surprise given the short-term extended posture.


Some of the bigger names reporting earnings the week of April 25th-29th:

• Monday: ABFS, CYOU, BEAV, BPOP, ACGL, MAS, RCII, SANM, UCTT, VECO, WRB, and WCN.
• Tuesday: MMM, ACPW, AKS, ACI, AN, CPLA, COH, KO, DAL, F, GPI, HSY, ITW, LMT, LO, MHP, ODP, PCH, RYN, UA, X, UPS, LCC, VLO, WDR, ADVS, AMZN, AJG, BGS, BDX, BRCM, BWLD, CNI, DV, EHTH, FORM, IRBT, LIFE, MIPS, HA, RFMD, SSCC, SWK, SFSF, SMCI, UHS, USNA, VSI, and WBSN
• Wednesday: ARMH, AUO, ABX, BA, BP, EAT, COP, DPS, ENR, GD, LAZ, LAD, ERIC, MSO, MCO, TUP, WLP, WHR, AKAM, ALL, AVB, BIDU, EBAY, FLEX, FLS, LOGI, MBFI, NSC, ORLY, SBUX, TQNT, and VAR.
• Thursday: ABC, BWA, BGG, BMY, CAB, CAH, CELG, CME, CCE, CL, XRAY, D, DOW, XOM, BEN, HEP, HST, IMAX, KBR, MJN, OXY, OMX, OSK, PEP, POT, PG, PHM, CELL, CSTR, DECK, TWC, STRA, KLAC, MSFT, MWW, NTGR, SIMO, TRLG, and VRSN.
• Friday: AXL, CAT, CVX, DHI, FLIR, GT, LEA, MRK, and WY.

SLV - Watching for short-term blow off top as price edges above the upper BB and trades along the upper channel line.



USD testing the upper level of support zone. Looking for an oversold technical bounce any time now.

Biotech Day Trades

After last Monday's huge earnings gap, AMRN formed solid base, setting up a target trade back to the upper range of the gap up day.

AMGN and TEVA were earnings disappointments, setting up downside extensions.

Technical Picture - Tech Leads Markets Higher with Huge Gap

The markets gapped up sharply on the heels of good earnings from tech bellwether INTC +7.8%, as well as VMW, JNPR, and YHOO... Not much in the way of extensions for the indices, but only limited selling pressure off of the mid-morning highs.

After hours we got more favorable tech earnings from FFIV, QCOM and AAPL. Markets are extended very short-term.


There's a lot of talk about SLV being way overextended, but so far, it has managed to stay within its rising channel. I am waiting for a huge gap open which takes price beyond the upper channel line and well beyond the upper BB, setting up a short. We may get that tomorrow as SI_F is trading at $45.62 as I write this post.

This is a chart of AAPL post earnings. The profit taking in the second half of the after hours session is somewhat suspect. Will be interesting to see which support level will hold, if any?????

Day Trades

ALXN - Low risk, long entry ahead of earnings tomorrow morning.

RVBD - Support was holding and I couldn't resist the low risk setup.

NTES - Failed breakouts yesterday for NTES and SOHU set the stage for today's weakness. Another NR7 (low risk) setup.

Technical Picture - Modest Gains

Markets are little changed since my last post on April 5th. Tech is till lagging with weakness in tech titans AAPL and GOOG, as well as disappointing guidance from INFY late last week.

The SPY is carving out an inverse H&S pattern, but earnings will be key.

Companies reporting earnings the week of April 18th-22nd include:

• Monday: C, LLY, HAL, KEY, AMTD, GWW, TXN, and ZION.
• Tuesday: BK, CMA, FRX, GS, JNJ, NTRS, BTU, STT, USB, CREE, CSX, HBHC, IBM, INTC, ISRG, JNPR, MANH, STX, STLD, VMW, and YHOO.
• Wednesday: ABT, MO, AMB, T, ATMI, ELN, EMC, FCX, HBI, FCX, NDAQ, DGX, WFC, AMGN, AAPL, CPHD, CAKE, CMG, ETFC, FFIV, GILD, LRCX, MAR, QCOM, WDC, and YUM.
• Thursday: BBT, BIIB, BLK, CNH, CY, FITB, GE, MCD, NOK, NUE, PCX, PM, SLB, TZOO, VZ, AMD, SNDK and SYNA.
• Friday: Markets closed in observance of Good Friday
  

AAPL has carved out a bearish H&S top. Earnings on Wednesday.



Friday's Trades - MBI low risk entry as price moves out of the retracement zone.

CTSH - I was looking for a short entry around $78.50, but didn't get a NRB, so I passed. After a minor extension, price formed a nice base at $78.50 and took it long back to the ambush zone. Should have shorted the ambush because there was no volume on the rally.

Thursday's Trades - JBHT - gap and flag.

CAT - Low risk long on break of flagging type pattern. Add on the B&B setup.

Technical Picture - Markets Mixed

We got off to weak start but supports held and the broader markets managed to test and notch marginal new highs, on strength in gold, silver, and semis (TXN/NSM merger). Technology overall, however, remains weak. Hence if the NASDAQ can't confirm the action in the broader markets, it starts to weigh, and eventually, pulls them down too. That's basically what happened this afternoon. Look at the difference between the ES_F and the NQ_F. By EOD we have a potential double top on the ES.



We've discussed the symmetrical triangle pattern on the GDX for several weeks, and today it finally broke out with decent volume. The bullish inverse H&S pattern in GLD also broke.

I traded GG in my swing account, took a partial and holding the balance. After hours GG announced expansion of the Cerro Negro project in Argentina - according to feasibility study - proven and probable gold reserves double.

Day Trades

ALXN, highlighted over the weekend as a bullish setup on the daily. Placed fibs from late day handle to ORH. Enter long as it pulls out of the Rzone.

LULU - bull flag good for a pt.

QCOM - highlighted last night as a bearish wedge on daily. I was tempted to short when it paused at the 38% Fib. retracement, but I waited till the feeling passed because the markets were still in an uptrend and there was no tangible setup. Shorted into the close for a retest of yesterday's lows.

RIMM - short into the close on break of NR base.

Technical Picture - Consolidation - Markets Mixed

We had little in the way of catalysts during the trading session, to move the markets, hence we printed inside days. After hours TXN announced bid for NSM at 70% premium over closing price. This prompted buying in SMH and more specifically in names similar to NSM such ADI, MXIM, ISIL, and LLTC.

We'll see if the euphoria carries over into tomorrow's session. At the moment, the S&P futures are ticking down as depicted below. Support in the 1320-21 area looks good and I would be a buyer, notwithstanding negative news.

QCOM forming bearish wedge. Prelim. target $50.00. QCOM popped after hours on TXN/NSM news, but I doubt it will hold for long.

Day Trades

ALXN - Fib. retracement trade

TCK - Traded in my swing account. TCK is on my short WL of Canadian stocks (mostly commodities). TCK formed a bullish flag on 5 min. timeframe. I took a partial at full extension and swinging the rest. From the daily chart above, we see an inverse H&S pattern basing for a BO. Full measured move will bring us back to highs and beyond.

RHT formed a nice flag pattern (tweeted by Independant trader). Exit after it formed a bearish tweezer top, because it just didn't have enough profit at that point to partial and ride it through.


RIMM - shorted break of PDL and it snapped back. What else is new? I keep trying the same bear flag BO trade and keep getting the same result. I was getting a little discouraged, but deep down, I knew it was going to break eventually. So I sat back and placed my Fibs from Friday closing handle to opening swing low and waited to see if anything developed. Price rallied to 1.27 FE, carved out some bearish long upper shadows, and fell back into the retracement zone. So I decided to short again as price broke out of the Rzone. Finally, lower prices. Took a partial at weekly S2 (1.62 FE). Price then retraced sharply, sort of forming a triangle into the close.

Not sure what to expect tomorrow. Felt there wasn't enough volume on this move lower, to risk a swing on the second half, but I will get back in if we break $53.85.