Technical Picture - Constructive Price Action

IBD is changing their market outlook from "Market in Correction" to "Market in Confirmed Rally" based on the out-performance of the Nasdaq today, despite the lack of volume. The logic is that prices have moved high enough above 50 SMA. The next hurdle will be to get above 2800, which should take time as there is a lot of resistance.

As we can see from the 60 min. SPY chart below, we briefly fell out of the rising wedge on late day weakness yesterday, but managed to hold in early trade today and recover by the end of the session.

If copper is a leading indicator, it may be premature for the bulls to reclaim victory, as copper has slipped back below both the 50 and 20 MAs.

Leading stocks are performing well. A few examples include SOHU and UA strong performance today as depicted in charts below. LULU strong performance yesterday with follow through today.

Day Trades

SOHU was on my focus list. I entered small size on break of weekly R1. I added when price held R2 and formed a bull flag. Exit at daily resistance. I missed the UA trade because it didn't show up on my momo scan which has a criteria for min. RSI of 60.

APA was a HCPG pick for target trade back to resistance.

APOL gapped down on weak earnings. I shorted it when it breached it's base, but the trade was slow and lacked volume. I covered on the first signs of a reversal. I entered long when it consolidated back at the original base. Exit at daily resistance.

RIMM set up a long entry on third test of resistance, but wasn't able to follow through after the initial thrust.

Technical Picture - Minor Losses

Minor corrective action on weaker than expected economic data and confusion over foreclosure processes, as depicted on the intraday SPY and QQQQ charts above and below. The SPY retraced 62% of the last leg up and the Q's retraced 38% before bouncing into the close.

After hours, GOOG's big earnings beat ( +$0.96 above consensus) have NQ Emini futures trading slightly above daily resistance. GOOG is up close to $50.00 from its daily closing price.

Tomorrow is OPEX so expect more volatility for option-able stocks. Also, keep an eye on the economic calendar.

Today's Day- Trades:

FSLR was testing its trendline after retracing 50% of the last leg up. It had carved out two NRBs ready to expand. The pre-market price action setup a tradable entry point at $140.00. The targets based on the daily were 20 MA and resistance at the blue line. The trade was executed as depicted below.

CREE had relative strength yesterday in the wake of disappointing earnings by INTC, so it was worth a second look. As you can see from the daily chart below, it was a good candidate for a target trade to the base of resistance at $57.00. I'd like to see it consolidate at this level before breaking out. The next target is a move into bearish gap resistance.

Price penetrated the PDH on the OR and consolidated setting up an easy long.

STI was from the Trade-Ideas scanner and setup a bear flag short on banking sector weakness.

Going forward, I like the following charts:

ALTR has held support of BO point and is testing the trendline. Long above blue line.

WYNN is holding support of $100.00 as it flags. Could be a big move.

AMZN has been basing $157.00 for several sessions and will likely move higher in the aftermath of GOOG's big earnings beat. Hopefully it won't gap too much.

P.S. To Trader-X fans, he's back!

Friday's Trades - Research In Motion Limited (USA) (Public, NASDAQ:RIMM); Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)

HCPG daily spot for MOS on Thursday night's newsletter was $55.00. Juxtapose the MOS 15 min. and the POT 15 minute timeframes and they are identical. So, if we can target trade MOS to the daily spot, we can also target trade POT to resistance of Wednesday's high. I'm not suggesting that you trade both, I'm just saying, if like me, you prefer POT, trade POT. Get your inspiration from the HCPG newsletter, borrow the setup from MOS and apply it to POT, or not. Either way, both trades are winners.

The trade is executed on 1 minute. Price forms a handle at the base, breaks out for a gap fill, consolidates and extends to the target.


RIMM was an ambush setup on the daily. RIMM turtle souped (printed a lower low on initial test of support of the PDL and reversed). It chopped around and eventually carved out a tradeable triangle on the 1 minute timeframe. After the BO it moved quickly to close the gap, consolidated and rallied up to PDH.

More consolidation in the upper half of the day's range led to a second entry.


Friday's market action was narrow range and choppy, but also on the bearish side, so that tells us that we don't want to over stay our long positions. Target trade and get out.

N.B. Turtle Soup refers to a Linda Raschke trade setup I read about in this month's Active Trader magazine.