Nice Setup Relative to 5-Day MA - SRS

SRS (inverse real estate ETF) setup nicely today relative to its MAs. It opened with a WR first 15min bar which is an early indication of increased volatility. The second 15min bar closed above the 5-day SMA (orange/peach colored MA). The third 15min bar was strong and took out the 30min ORH. The next four 15min bars were a pullback that culminated with a hammer-like bar off of the previously broken 5-day SMA. The high of that bar also lined up with the 30min ORH. The entry was a rebreak of the ORH. After some resistance at the morning high, it broke out and easily hit the 62% extension of the 30min OR.

The location of the hammer-like bar (7th 15min) was in an ideal location relative to the 5-day SMA and the 15min 20EMA.

Opening Range Breakout - Agrium Inc. (USA) (Public, NYSE:AGU)

Shortly after 9:00 EST, the TI pre-market scanner had a lot of activity in Agchem, with CF ripping higher and AGU lower. AGU for CF was in play - short the acquirer and long the acquiree. I place my fibs from the pivot low to the pivot high and the trade became obvious with NRIB at base of R-zone.

A second trade presented itself on the retracement. This time place fibs from ORH to morning pivot low and watch price in the R-zone.

CF didn't go anywhere near the offer price (I read $72 on Briefing, but maybe it was a typo).

Last night we said that after yesterday's gold drubbing, we might get a snap back. Okay, so that was too optimistic, but the ORB trade set up nicely as price tested the R-zone for support and rallied from there.

The snap back rally might happen tomorrow. As you can see from the daily chart of ABX, today's stick is an inverted hammer and could form the middle bar of a morning star reversal if tomorrow we rally up to the mid-point (or more) of yesterday's WRB. Many gold stocks printed similar patterns so not just ABX.

Last night we said FSLR was trading lower on earnings. I was watching it out of the corner of my eye, but must have been distracted, because I missed the actual BO. Rather than jump in, I waited for price to consolidate. Place fibs above BO base and wait for retracement. I was expecting a flag, but instead I got a shoulder, so I knew that I had to get out earlier than planned ( 15 min. chart looked like inverse C&H).

Nice extension (big head). I should have entered long as price broke above 50% extension level (NRIB), but I was waiting for inverse H&S to take shape. It got sloppy and didn't break successfully. Finally jumped in on a mini three point base.

Short into the close. Since the close is weak we may get further downside tomorrow. The prelim. target would be $100.00, but could, over next few sessions fill the Nov. gap.

Opening Range Breakout - Agnico-Eagle Mines Limited (USA) (Public, NYSE:AEM)

Both AEM and NEM are the same type of setup. I'm placing my fib lines from the PDH to the ORL or early pivot low and looking for potential retracement trades (back to Friday's highs). AEM worked perfectly and NEM started out as planned, but couldn't follow through on the second half, so I had to short it on a lower high in the R-zone.

If you're like me, trading from a WL, focusing on certain sectors, you probably look at what's going on with yesterday's winners for follow-up trades. If not, this post won't be of much interest. Trying to find the best Fib. placement for these types of trades that gap within the previous day's range is challenging. I really like how this Fib. strategy worked for me, because both charts were easy to read. For AEM the R-zone acted as support, whereas for NEM, it acted as resistance. In both cases it was clear what action was required to make money.

Biotech Breakout - Amylin Pharmaceuticals, Inc. (Public, NASDAQ:AMLN)

Last 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.

RIO and SID were gapping into the daily spots.


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.



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.