Retracement Trades - Goldcorp Inc. (USA) (Public, NYSE:GG)

GG was short at the base of the retracement zone we talked about last night in reference to ABX. I switched from ABX to GG because ABX was halted pending news and gapped much lower when it finally did open. Notwithstanding more bad news, gold in general should form a short-term bottom around these levels and we'll be watching for another long entry to set up.


The 60 minute chart of the SPY above illustrates support/resistance and congestion zones. It was clear from the lack of momentum on today's rally that resistance at $104.00 would hold. Just wait for a failure. If price holds within 2 upper blue lines, it could form an inverse H&S, and possibly break out of $104 on next test, but I'd like to see a gap fill beforehand.

On the 5 minute chart below, I missed the C&H on the way up, but I was ready to short the head fake at $104.00. Take a partial at the base of the C&H and exit balance at low end of congestion zone (green lines).

Technical Picture - Gold Pauses

Markets gapped up on a weaker $USD with energy (solar)/commodities leading the session. Gold gapped wide and participants took profits as prices tested resistance. Solar may have bottomed - FSLR and ENER had impressive runs today.


I closed my swing trade in ABX as price gapped wide and immediately started to fade. I entered long on an ambush setup, but after breaking out of the Fib. retracement zone, it started printing lower highs and fell back in. Scratch the long and short.

As you see from the wider view below, ABX is on the edge of the retracement zone so I'll be looking for a long/ambush trade to setup tomorrow. If you missed the BO last week, this could be a good opp.

Technical Picture - Consolidation Ahead of Jobs Data

Another narrow range session as participants move to the sidelines while awaiting tomorrow's jobs data. Gold, however, continues to shine, as the high volume momentum play extends.

Jobs data will set the tone for morning trade and then a quiet afternoon as people getaway for the long weekend.

After yesterday's high volume, WRB in gold stocks, I was anticipating follow through, but did not want re-enter before a pullback. By placing fibs from last leg up - point A to B, we can sit back and wait for an ambush trade to develop. GG retraced almost 62% and bounced for the next leg higher. I entered as price crossed above 38% retracement level. Took a partial as price approached 50% extension and was stopped out on balance. Volume today was brisk and from the daily, we see a clear path to the $44-45 level.

I took a partial on my ABX swing EOD just in case we get really favorable jobs data. I doubt that the data will be strong enough to kill the gold trade, but better safe than sorry.

Technical Picture - Flight to Safety

When I heard CNBC say that gold was up 9 pts. in pre-market, I knew that the flight to safety trade was in play following yesterday's sell-off. Gold is a leading indicator and today's high volume breakout signals that investors believe that this market correction, will be deeper than the last.

The S&P, meanwhile, printed another NRB and appears to be forming a H&S top.


All of my gold WL stocks opened strong and rallied all day. AEM gapped up and carved out a C&H pattern in early trade. Took a partial on full measured move of the pattern and held the rest to 200% extension. Traded ABX in the retirement account for a swing trade. As noted above, there was big volume supporting this move, so it's worth hanging in or re-entering when the second base breaks out.


POT - AGU for POT rumor triggered some buying off of the ORL. Managed a couple of quick target trades as POT carves out an inverted H&S bottom. Keep this one on the focus list for tomorrow.

Technical Picture - Distribution Day

Yesterday's NR7 was a perfect foreshadowing of today's expansion. Despite the stellar ISM and pending home sales data, the bears easily took control of the session and held into the close. Financials paced the way lower amid rumors, along with commodities/energy on a stronger $USD.


The tail end of the range bound market was difficult to trade. One strategy that worked well was buying/selling a head fake lower/higher. Using PDH/L as trigger points, look for reversal candlestick patterns shortly after trigger point has been breached - ideally this happens in the first/last hour of the trading session when volatility is highest.

Technical Picture - Narrow Range Chop

After a weak start the markets got a boost from better than anticipated new home sales, however, failed to follow through with much of the session spent in narrow range chop. That leaves us with NR7 (price/volume contraction ) on the daily. Tomorrow's pre-market economic data should set the tone with initial claims, prelim. Q2 GDP and core PCE at 8:30.

As noted earlier in the week, V is carving out a Cup & Handle pattern at $70.00. Yesterday it formed an intraday base at $69.00. Today I decided to place a buy stop order on a break of PDH for a target trade to the C&H base. Price consolidated midway to the target, but held support of R1 (not depicted), eventually reaching the target.



MYGN was my gapper trade. It formed a C&H which broke late in the session, but the extension was really lame. Bullish island reversal on the daily could develop some follow-up trades.

Technical Picture - Bearish Candlesticks

Markets notched new intraday highs on strong economic data, but failed to hold. After failing to retest the early highs, prices retraced back to session lows. This leaves the S&P with two consecutive shooting stars and possibly a tweezer top reversal pattern.

Keep an eye on economic data tomorrow - durables in pre-market, followed by new home sales at 10:00 EST and crude inventories at 10:30.



If you have POT on your focus list, we lucked out again today with a bearish h pattern. Quite similar to Jim's CME bearish flag yesterday, except the consolidation has more of a curve. Price penetrated support from 3 PDLs (red line segments) and tried to save itself through a lengthy period of price/volume contraction. But the bears were victorious on the expansion. Once support gives way, all the preset stops trigger resulting in a fast move to the next support level.