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.

Technical Picture - Tech Leadership

The markets gapped up on the open, the SPY probed its 50 day SMA and faded. Once the gapped was filled and prices stabilized, the bulls regained strength and pushed prices back up. Leadership was provided by tech including casinos, disk drive, internet, software (RHT earnings) and semis, in other words, a broad based tech rally.

As depicted on the SPY charts above and below, the market is extended in the wake of the rally from last week's lows. We have wedged our way back up to the short-term downsloping trendline and a pause here would be good. Rally has been on lower volume

Economic data - GDP in pre-market and Michigan sentiment at 9:55.

Copper has retested broken trendline and we will soon see if this is a dead cat bounce or not. HG_F look like they are forming a topping pattern, basing just above 430.

GDX profit taking took hold this afternoon after the big move from the lower edge of this symmetrical triangle. No surprise given the overbought bias.

Biotechs setting up a solid base here. This defensive sector looks poised for a BO soon.

Biotech sector names - I like CELG - solid base forming after testing long-term support.

CEPH (not depicted) just won its FENTORA patent suit against WPI.

AMRN if it regains $8.00.

GES Bear flag on daily. BO point is $37.50 as long as it doesn't regain its 5 period EMA (orange line on 15 min. chart below.)

Day Trades

FOSL - was hoping this would wait and set properly, but it based at $85.00 and eventually broke for a quick scalp.

JDSU gapped up, consolidated and broke above 5 day EMA.

RIMM was a good day trade into earnings, but after hours, it fell out of favor on weak guidance.

Key supports in play are mapped out on daily chart above.

Technical Picture - Markets Pare Back Losses on Softer Volume

On the wide range view of the daily $SPX chart above, we see that price is testing the summer 2008 highs that formed a bear flag before the big plunge into darkness. This could serve as a support area however, we've yet to see any conviction on the part of buyers since the correction started. Major support levels on the $SPX (blue lines) 1275, 1260, 1220, and 1175.

Friday's bounce was no different, as we bounced on below average volume on the $SPX. The SPY chart below shows above average volume on the gap support bounce, however, still far less than on distribution days.

I'll be interested in semis again, when test the support zone. The current sell-off has a lot of conviction, and I don't want to get in the way of angry bears. The handle that formed in the support zone looks solid as to time and price coiling, so I suspect we could get a good bounce once it comes into play.

MOO gapped into the support zone and bounced. No position yet, lacks volume.

Oil printing a series of dojis as it pulls back. The doji signifies indecision. The Japan earthquake/tsunami will see lower demand from that country and the Saudi protest that wasn't = another doji.

CNQ bounced from its 50 DMA and trendline support, but here again, the low volume signals a lack of conviction on the part of buyers.

Copper looks good here. I expect a rally back up to the broken trendline. Looking at FCX, SCCO and TCK.

SU was a HCPG pick for Friday, and it played out as expected. Decided not to hold for a swing based on volume, however, SU carved out a bullish engulfing on the daily. Tomorrow, I'll look for a retracement zone trade, keying off of Friday's WRB.

Traded the ranges on low priced optical names CIEN and JDSU.

I also like the ARMH range below the gap and the potential for a gap fill.

SBUX was a failed trade on Friday, but I still think this name looks well positioned for gap fill.