Technical Picture - Consolidation Day

A choppy consolidation day as the markets digest last week's rally and weak economic data (jobless claims and Philly Fed at 10 EST (8.0 vs. 20.0 expectation). As we approach quadruple witching options expiration tomorrow, stocks typically chop around. Gold showed leadership in the early going but follow through was lame as the gold ETF GLD retested resistance.

Still, trade is constructive. A late session surge left the major indices with fractional gains for the day.

$USD weakness vs. Euro strength continues, but minor support/resistance in play as depicted on the charts.

GLD forming ascending triangle. Will today's gap support hold, or will we fill the gap prior to attempting a BO?


My gold trades - GG and ABX didn't extend as I'd hoped. What was the rational for these two trades? Gap strength and prices holding support of 5 EMA, so buy pullback in the hope that break of ORH will lead to full extension.

AAPL - bull flag trade from yesterday.

Technical Picture - Follow Through and Base Break-Out

Yesterday stocks held resistance at their 200 SMA, but today's strong start led to a broad based rally with all major sectors participating, climbing past the key technicals to settle at a three week high. Euro strength was the primary catalyst.

FSLR gap and go, followed by a shallow retracement. Wait till it signals it wants to go higher. Partial 50% extension.

CELG bullish flag. Partial at 50% Fib. extension. Stopped out on balance.

INFY (gapper from yesterday) briefly took out ORH, then formed a handle to go long.

Technical Picture - Profit Taking at Resistance

Markets gapped up and rallied to the 200 SMA and full retracement of last week's slide. As soon as that widely watched tag occurred, price started to retreat as market participants booked profits. Selling was slow and choppy until Moody's downgraded Greece debt, resulting in an inverted hammer/ bearish shooting star daily candlestick pattern. Overnight, S&P futures retraced 62% of the PDR (previous day's range), currently trading in the ambush zone.

INFY from the Trade-Ideas scanner, gapped and rallied above the daily pivot R2 (blue dotted line). Price consolidated the gap in an orderly fashion. Enter long with target of weekly R2 which matches nicely with full Fib extension.

NTAP - Target 2nd half of full extension of Friday's pattern.

It was important to book full profits before the S&P tagged the 200 SMA because a sell-off was likely. I took half off my POT swing trade on the open. Still holding full NTAP swing trade in the hope that the market does not retest last week's lows.

Technical Picture - Constructive Market Action

Friday's action was constructive despite the lack of volume. The Nasdaq as depicted below retook the 200SMA. New highs on the NYSE outnumbered new lows 42/12 (Nasdaq 38/36). Several names we like and talked about in the comments were included in the new highs list NTAP, AKAM, NFLX. And the markets closed near the HOD on late day strength despite the lousy retail sales data.

We're not out the woods yet. The markets closed just shy of the 20EMA which was our next level resistance. Even so, we need to see a follow through day with big volume or we need to close above the previous high set on June 4th before the bulls can confirm that the correction is over.


The VIX looks weak. A close below the 62% Fib. retracement level could see price fall back to the base.

Transports testing the down-sloping trendline.


Failed rally attempt in $USD on Friday. Euro index (below) positive divergence of RSI and MACD to lower prices, foreshadows the end of the move.


In addition to NTAP, NFLX, AKAM, my focus list includes CRM, AAPL, PRGO, BIDU, SNDK AMLN, HGSI, APKT, POT, CNQ, CHK, and CLF. On the short side, as mentioned in the comments GS and CSCO. Also watching GLD (Gold ETF) and gold stocks. If GLD retests its highs and fails on the third attempt, I will swing short.

My open swing trades are NTAP (chart below) and POT long. Day trades on Friday - NTAP and AKAM long.

Technical Picture - Markets Push Higher

Broad based push higher on stronger economic data and euro strength vs. USD. Weakness was limited to Gold. Energy, commodities, transports, industrials... sported gains in the 4-8% range.

As depicted in the chart above, prices have pushed through the ambush zone. The next areas of resistance to watch are the 20 EMA, followed by the 200 SMA.

The ascending triangle BO in the $USD appears to have failed. Next support level is the 20 EMA.

OIL and Agribusiness charts are forming ascending triangles.


The SPY held support of the ORL and eventually made an attempt to rally. I mapped out the Fibs from the support base to the top of the early afternoon thrust, waiting for an ambush trade. It set up perfectly and momentum continued throughout the balance of the session.

Gold, was weak again today. This is my third consecutive day, shorting GLD and/or gold stocks.

I placed my fibs from yesterday's late day highs to this morning's lows and waited for a setup.

Technical Picture - Support Holds

The Dow and Nasdaq slipped a touch below their May lows, but the S&P as depicted above did not confirm, allowing for some corrective action into midday. That was followed by a retracement with the Nasdaq slipping below the morning lows, but not confirmed by either the Dow or the S&P, leading to a late day rally into the close. Use Fibonacci retracement levels from Thursday's high to today's low as a guide.

The weekly chart pf the $USD above shows that the sharp thrust from the 2009 lows is coming into resistance in the$90.00 range.

The daily chart below shows that the BO of the ascending triangle is having trouble with follow through. Also note the negative divergence of the RSI to higher prices.

GLD tested and breached 52 week highs, but failed to hold. The second test rarely succeeds (turtle soup), but the third test often does. Keep this one on the radar.

Day Trades:

AMZN - target reduced at Bofa-Merrill based on strong $USD. Yesterday's close was weak, the Bofa comments pushed it over the edge for a fast swoon.


GLD etf was going to test highs after yesterday's WRB. Find a gold stock with a clean base and wait for an opportunity. ABX - yesterday's highs held as support on the open. As price formed a triangle on 1 minute, I put in a buy stop order. I was long and short throughout the session as depicted below.

$USD Breaks Out

$USD has broken out of a small ascending triangle. On a measured move basis, target $90.00.