Starbucks Corporation (Public, NASDAQ:SBUX) - Is the Star Fading?

After getting beaten down in 2008, Starbucks has made a remarkable recovery. However, that recovery looks to be in jeopardy based on MarketClub's "Trade Triangle" technology and the findings of a 14th century mathematician.

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Technical Picture - Laggard S&P captures 200 SMA

The markets extended last week's advance with the laggard S&P finally closing just above its 200 SMA (NASDAQ, DOW and INDU achieved that milestone on Friday.) We've also retraced 50% of the May-June slide.

Biotechs have been pacing the way higher with M&A chatter ( SNY for GENZ). Last week I posted the GENZ daily chart before Friday's BO. Hope you guys caught this one. I traded it Wednesday earnings C&H pattern and again Thursday and Friday. Today I traded BIIB. The takeover is hostile and large caps such as CELG and BIIB are rallying along with GENZ as possible takeover targets if the GENZ deal fails.

AAPL setting up for expansion with 3 NRIBs since the earnings gap. Today's stick is NR7.

NFLX earnings gap extension and an identical trade again today. BOX trade - next test of support should break.

Also watching Ag/chem. POT daily shows price consolidating and could break higher anytime now.

Technical Picture - Trendline Resistance Holds

The U.S. markets were able to build on the momentum generated by the previous session's strong reversal in opening trade amid some favorable earnings reports from AAPL and others, but the action quickly turned into a fading opportunity. Technically, the S&P stalled on a retest of the downward sloping trendline. See the SPY chart below - the SPY opened where Friday's sell off began. Choppy/mixed trade persisted into the afternoon ahead of the Fed Chair's testimony at 2:00 pm EST. Up until then we had been trading within the initial trendline from yesterday's reversal. The Bernanke selloff started just two minutes in as price broke the trendline and swooned.

The testimony reinforced what we already knew, slower growth than previously estimated and high unemployment over the next few years.


Euro retracing after hitting resistance and USD retracing for a retest of the broken trendline.

C&H Day Trade - Genzyme Corporation (Public, NASDAQ:GENZ)

From the daily timeframe (above) we see that GENZ has a base of resistance at $54.72 -$54.75.

On the 15 minute chart below, GENZ carved out a C&H pattern at the base of the ORH. Place Fibs from the low of the cup to the base of the handle and target a full measured move of 100%. In this case the daily resistance is just 10 -12 cents above the full move, so I let it run a bit higher. Once the extension is underway, volume should expand with price as it moves towards the target.

Day Trade - Research In Motion Limited (USA) (Public, NASDAQ:RIMM)

RIMM carved out a tweezer bottom reversal pattern at the base of PDL setting up an opportunity to go long. As we can see from the wide range view of the 15 minute chart above, the reversal area coincides with a consolidation zone from last week's WR reversal bar. Price rallied back up to the ambush zone (50-62% retracement). After hours tech stocks TXN, IBM, ALTH sold off on weaker than expected revenues. So, the bias for tomorrow is short tech.

The next test of this support area will setup a short for RIMM. As we can see from the chart above, there's no support beyond $52.00, so there's a 2 point short trade if RIMM retests and fails to hold this support level.

Technical Picture - Distribution Day

Bank of America (BAC ) and Citigroup (C) both beat consensus earnings per share estimates, but failed on top line revenues. That sent the banking index down 5.7% leading Friday's plunge. GOOG missed earnings altogether sending the Internet index down 3.4%. The Michigan consumer sentiment index declined as well, leaving investors heading for the exits. It was a broad based sell-off on higher volume (partially due to options expiration) with all major sectors in the red.

The banking index looks bearish with MAs converging over price. The congestion zone should provide support, but how long will it hold? Financial reform was discussed on BAC conference call with analysts - they estimate the new credit card and other rules will cost them $3.8 billion.


GOOG earnings miss provided leadership for the Internet index - down 3.4%. The NASDAQ was down 3.1% on the day but volume was just average.

Chips have been range bound since breaking the longer-term trendline. INTC earnings were very good and I'm still optimistic on the sector.

Transports sold off , but volume was just average. Still, there's nothing to indicate the trend could change any time soon.

The one bright spot that I can find is Ag/chem (MOO). Normal consolidation on Friday despite the overbought posture.

Technical Picture - Markets Mixed

The S&P broke support of its prior two day trading range with the 10:00 release of the Philly Fed data (5.1 vs. 10.1). Price swooned, but gap fill support held. Prices eventually retraced back to yesterday's range in lackluster fashion. And just when the bears regained control, heading for a weak close, news that BP had managed to stop the oil flow and that the SEC was going to release a statement (potential GS settlement), the market reversed and erased all of its losses. Hallelujah!

Futures holding up well after hours despite GOOG's earnings miss. CPI data in pre-market and Michigan sentiment at 9:55. BAC, C, and GE earnings in pre-market. AAPL conference to explain fix for iPhone 4.

Ag/Chem was the clear winner of the session with POT pacing the way. A weaker dollar contributed to the strength, but the key factor propelling Ags higher are crop futures which were solidly in the green again today. The high heat in corn growing areas is another significant factor. I never thought I'd be following crop and weather futures.



The POT entry is just above the previous two day trading range. It still had plenty of room to move prior to hitting 50 DMA as opposed to AGU which was testing 200 DMA.

Took a partial at the 100% Fib. extension.

By EOD it tagged 150% level.