Large cap tech earnings tonight might stall the rally. The first chart is the daily Nasdaq futures, currently printing a bearish stick for the day.
The nice thing about mapping out all the support/resistance levels on your favorite stocks, is that you can quickly visualize the perfect entry when price consolidates at or near a previous S/R zone. Also, if you miss the perfect entry, you can gauge whether or not to jump in midway, depending on the profit potential to the next S/R level.
I hadn't planned on trading EBAY, but when it carved out a C&H pattern with NRIB (NR7) as the trigger, I couldn't resist. The pattern failed and I was stopped out. Why?
Well, if we look at the 24 hour chart with the pre-market action, we note that price reversed after topping out at exactly the same price level where the C&H pattern attempted to BO (blue line). I was too rushed on this trade and didn't take the time to look at the price action in pre-market. Important to review PM price action especially for gap trades.
A slower start on some mixed earnings, but midday the S&P and Nasdaq carved out new highs. The DOW didn't confirm and the markets reversed. But despite the afternoon retracement, the Nasdaq managed its 11th consecutive higher close.
SPY trade - long on break of triangle. Exit at shooting star when price fails to hold $96.00 whole $ level. Short the double top.
GRMN was a HCPG pick from last night's newsletter. Look at the daily and see narrow range consolidation ahead of expansion. The actual trigger was $25.00, but I missed it and waited for price to pause. It's always best to wait for price and the 5 period ema to come into play if you miss the actual BO in early trade.
MOS - bear flag break. I was holding out for an inverse C&H, but MOS didn't want. I guess earnings AH had a lot to do with it.
The advance stalled when the S&P tested it's June peak. The combination of extended technicals and disappointing outlook from CAT's conference call, and the Fed Chair's outlook for a slow recovery, led to a steady but only modest slide into early afternoon trade. However, no follow through developed with the S&P stabilizing near congestion and bouncing into the close allowing the markets to extend their winning streaks (Nasdaq up 10 in a row) and all majors setting new multi-month closing highs). But the SPY carved out a red hanging man and the S&P a green one. Haning man has to be confirmed.
The H&S top in POT which I described last night was broken on the open when price gapped and tested Friday's highs. However, sellers fought back. A bull/bear battle ensued. The initial price action was like a yoyo with wide spikes up and down, but the bears had the advantage as measured by lower highs. Eventually, we reached price/volume contraction and a bearish rounded pattern took shape, leading to expansion on the down side.
MOS forming H&S top intraday at $48.00
HCPG were on fire today. I managed to get in on two of their picks from yesterday's newsletter - SNDA and FFIV. It's a good thing these didn't break until the afternoon, because I was going into the session bearish given that the markets were so extended.
POT is on my bearish list because it's in such a weak uptrend in a bullish market. I shorted it when it formed a bearish topping pattern early in the session. It could be forming a bearish H&S top intraday, so I would be looking for a short if it breaks the base at the blue line. If you're trading the Canadian TSX POT, that's roughly equivalent to $100 CAD.
