Technical Picture - Bullish Price Action on Weak Volume

The SPY has retraced 62% of correction. Despite breaking above that level intraday on Friday, the close was on the line. Looks like an ambush play could be setting up early in the coming week. Ambush - price retraces 50-62% and then reverses back to initial trend, which in this case is the correction.

Last week's uptrend took place on sluggish volume. No accumulation days so we are still in a technical correction. Still a number of leading stocks in a few sectors had bullish moves. Biotechs CELG and ALXN are trading at 52 week highs. Another biotech, HGSI (chart below) looks poised to BO any day now.

JOYG forming a handle on developing C&H pattern.

MA didn't BO out of bearish flag as I had hoped, although it did grind lower. We'll give it more time.

CLF was one of my favorites this week as I was able to get two back to back winners as depicted below.

Keep this one on the WL. We have a bullish flag pole following earnings. Next resistance level is $55.00. Once that is out of the way, we go to $60.00.

Technical Picture - Low Volume Retracement

S&P has retraced almost 50% of the correction thus far. Volume is light so I don't expect we'll get much beyond resistance, unless we get some really good economic data, starting tomorrow with housing/building starts, capacity utilization and industrial production.

IAG on TSX was on my focus list this morning after Friday's big move. Looks like a bona fide breakout is underway, although I would've liked to see more volume. Holding half for a swing.



GS day trade - flag BO above resistance.

Flags for Swing Trading

MA forming bearish flag following earnings miss. Could BO anytime as price contracted over last few sessions.

APKT formed a bull flag following earnings beat. On a measured move it could go to $18.00 so it's not too late to jump in.

Notice how both names had huge volume on the gap days giving us confidence in the setups.

Earnings Gap - Baidu, Inc.(ADR) (Public, NASDAQ:BIDU)

BIDU gapped on earnings and guidance. After a shallow retracement, price found support from the rising 5 period EMA. NRIB - NR7 was a perfect entry point.

The bounce off of Friday's lows as depicted on the 60 minute chart of the S&P futures, is developing into a bear flag. If price doesn't rip through the upper channel line soon, wait for break of blue line.

Technical Picture - Hammer Reversal at Support

Volatility spiked Friday and market prices fell into support. When the USD finally reversed off its highs, commodities, gold and the markets ignited a short squeeze. We ended the session with high volume bullish hammer reversal sticks all round. That leaves the door open for retracements going into this week. The CPC level is too bearish which confirms the potential for a bounce.


$USD strength attributable to macro economic concerns over Greece, Spain and Portugal. But the move is extended into resistance zone.

Commodities and financials and many other sectors well positioned for technical bounce from oversold levels.


A couple of trades from Friday.

Trade setup in futures for this week. Price may pull back towards lower blue line, in which case we'll start scaling in ahead of the bigger move at the base.

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Technical Picture - Bears Own It

A gap down open followed by broad based selling. Actually, I was caught slightly off guard as I was expecting this sell-off to happen on tomorrow's jobs data.

The VIX had been forming a bullish flag and today's selling was a good opportunity to trade VXX.


TLT formed a bullish flag (gap is the flag pole).

AGN, courtesy of the Trade-Ideas momentum scan, formed a bearish tower top as it struggled to hold R1 weekly pivot.

Flags - Research In Motion Limited (USA) (Public, NASDAQ:RIMM); Baidu, Inc.(ADR) (Public, NASDAQ:BIDU)

RIMM formed a perfect bull flag. Entry on break of whole $ level. Price stalled midway to the 50% extension. It failed to hold the base as support, but snapped back quickly. Price finally reached the weekly R2 level .

Since the markets are in a confirmed bearish correction, lower the expectations on long setups. Most trades are not going to reach full measured moves in this environment.

BIDU, also a bull flag setup. Entry on break of hammer reversal bar. Then a lot of sideways chop, which held the weekly R2 pivot as support. Finally, volume kicks in and price manages to take out the ORH. Exit as price approaches round $ level.

Another try with GS generated another failure. The setup was an ambush play with support of 20 EMA. The trade was slow. Volume contracted as price attempted to retrace. Too much supply and the stock started to roll over.