Technical Picture - Minor Gains

Weaker than expected economic data set the stage for a gap down on the open. However, trading range supports held as depicted on the SPY and QQQQ charts above. The SPY opening gap was filled within the first hour of trade, after which it was slow grind until the final hour, when the Qs managed to take out the PDH. All major US markets closed in the green, near the highs of the session, but the overall gains were minor.

Leadership came through health and medical, disk drive, hardware, airlines. Weakness was noted in crude, steel, solar, and gold. Leading stocks are acting well.

Tomorrow's economic data starts off with initial claims and PPI in pre-market, followed by Philly Fed at 10:00. RIMM reports earnings tomorrow, after hours.

MA was news related gap up (share re-purchase plan). After a bullish opening range, price consolidated the gap through time, forming a bullish flag pattern. Place fibs from low to high of pattern to establish target for measured move.

The second breakout bar carved out a bearish engulfing stick, but was quickly neutralized back to BE. After that, price expanded in the right direction.

After breaking out last Friday, RIG has consolidated in the upper range. Today's close near the range top, foreshadows an extension soon.

RIG's early strength this morning was looking good for a BO, however, the sloppy basing pattern (wide shadows on 15 min.) set up a fast move back down to intraday support.

Price quickly stabilized and I entered long for a retest of range top.

ADBE has consolidated last week's bullish gap and looks ripe to expand higher very soon.

PRGO (discussed last night) - preliminary target was met today, so I sold my remaining shares. It needs to consolidate, but if the markets BO, it will likely go higher as well.

Technical Picture - Testing Resistance

The markets are somewhat extended given the 8.4% surge from the August lows. We are testing multi-month resistance and consolidation (backing and filling) is constructive. No worries as long as we can hold the 200 DMA on a closing basis.

The semis have participated nicely this week, giving the QQQQs leadership over the SPY.

Gold broke out with volume today, but the profit taking into the close leaves me tentative. I had planned to hold some of my GG day trade overnight, but changed my mind as prices started to swoon with volume into the close.

TLT - Looks like a successful test of support and the trendline.

$USD weakness vs. Euro strength.


PRGO broke out of a multi-month base. Yesterday, I saw it ripping on the Trade-Ideas scanner intraday. Today I had my alert set for a break of PDH. I'm holding half for a swing. Target resistance - upper blue line.

Technical Picture - Moderate Gains

The markets spent much of the week digesting the prior week's big move. We ended the week with modest gains after some backing and filling.

Friday's leadership was provided by Oil Services with drillers pacing the way (RIG, DO, ATW...) Some refiners also moved higher (FTO). Watch for this sector to move into its base for a retest of the August highs in the coming days.

Biotechs and healthcare also saw strength on Friday. Testing August highs - needs to consolidate before breaking out.

Financials holding up well.

Semis are a drag on the NASDAQ and the markets in general. Need to see something positive price action in this group soon.

Best trade on Friday was RIG breakout. RIG was HCPG pick which generated three trades for me. The first on Thursday was a target trade to the daily spot following a bullish flag pattern. The second was the planned BO at the daily spot $56.00. The third was a short on the third test of the round $ level $60.00 on 1 minute chart.

CMG flagging on the daily (thanks to Trader Rick for spotting this one). Also flagging are TCK, BVF, BWLD.

Technical Picture - Consolidation

Stocks opened on a firmer note following some favorable overseas debt auctions offsetting yesterday's concerns. Leading stocks paced higher topping out around midday when the DOW failed to confirm higher highs in the Comp and S&P. Stocks pulled in slightly ahead of the Beige book which was a non-event. Choppiness ensued into the close.

As we can see from the S&P chart above, we are flagging at the cusp of the down trend line in the upper range of last week's flag pole. However, many momo stocks such as AAPL (chart below) and GS are testing resistance from the August highs. Also, I'm seeing a number of long upper shadows on the dailies of my WL.

The CREE short setup was highlighted by Steve Place on Stocktwits TV yesterday. Short on break of ORL. Price closed at the round number $50.00. Other names breaking down with volume today include V and MA.

FFIV tested resistance from last two sessions. Placed my Fibs from the low of the outside day to the upper base. Missed my exit when price suddenly reversed just shy of the target.

MTL was a HCPG pick from last night. I ignored the false BOs and placed my fibs on inside support/resistance. Worked out perfectly for a full extension.

NTAP broke resistance and rallied two points. Now it's really extended. We have a mini double top on the 15 minute timeframe. I'd like to see a retest of the base at $45.00. Could setup up a fast move lower on a trendline break.

Also watching gold names as they retrace back to their trendlines.

Technical Picture - Wide Spread Weakness on European Banking Concerns

Concerns over the health of European Banks led to widespread selling on the open. Not surprisingly, banks (BKX) paced the ways down, giving back all of Thursday/Friday's gains. All but Gold was in the red by days end. Volume was light.

Banking concerns fueled money out of stocks and back into treasuries as depicted on the TLT chart below. Until the trendline is broken, I doubt we can have a meaningful rally in stocks.

Banking concerns stoked volatilty as the VIX gapped higher after testing four month lows on Friday.

And as expected the USD rallied versus the Euro.

Despite today's low volume retracement, we have to keep a close watch on the TLT, VIX, and USD to monitor the underlying strength/weakness/fear inherent in the markets.

Today's trading was light given the overbought conditions and general lack of setups.

Using the RSI price bars, I was able to catch a quick point in GS. Positive divergence to lower prices foreshadowed a trend reversal. GS forms a mini base and I used a buy stop order above the base to get long.

MON broke the downsloping trendline, but failed to hold. Now it should retrace into the support zone/5 day MA and we'll see if it can do something from there.

NTAP - two pivots into the $45.00 base. Needs to consolidate/retrace back to first level support. As you can see from the monthly timeframe below, key resistance dates back to 2000.

Technical Picture - Markets Extend Recovery Rally

The weekly S&P chart above shows a bullish tweezer reversal and bullish engulfing bar following three consecutive higher closes Wednesday through Friday, not unlike the July low reversal.

Narrowing the view to the daily using the SPY, we see that last week's trend reversal was accompanied by two bullish gaps in response to better than expected economic data. Friday's jobs data was the first respectable report in four months. Price gapped up and rallied into the 10:00 hour, reversed for a half gap fill fill, before trending near the opening range highs in afternoon trade.

Looking ahead, initial resistance is the unfilled portion of the August 11th bearish gap, highlighted in pink, followed by the congestion zone at resistance in the $113.00 area. A healthy market needs the time to digest last week's gains before attempting to break higher.

$USD weakened as stocks strengthened. Testing first level support.

Financials rallied off their lows last week. GS finally decided to participate on Friday. GS rose to the top of the leader board in early trade. Using the RSI price bars helps pinpoint the best entry as depicted below. Unfortunately, the trade was stopped out on a sudden sharp retracement, well ahead of the target.

Continued strength in the Agchem sector approaching major resistance.

MON one of the weaker names in the Agchem sector, reversed in the ambush zone. As we can see from the 15 min. chart below, MON carved out an intraday C&H pattern. After gapping up Friday, it retested the base and rallied into the close.

I'm following this one closely, to see if it will break the downsloping trendline and participate in the sector rally.

AGCO (farm machinery) has carved out a C&H on the daily. It needs to consolidate last week's move before breaking out. Keep it on the Focus list.

Technical Picture - Trend Reversal

September got off to a strong start as participants ignored the weak ADP data in favor of strong economic data out of China and Australia overnight. At 10:00 EST, equities squeezed higher on much better than expected ISM data. Most of the day was spent in a narrow, sideways action in the upper end of the day's range, with fresh session highs hitting the tape towards the end of the day.

Sector leadership was virtually across the board with oil, industrials, and healthcare leading the way. Down ticks in treasuries, gold and gold miners. Volume was higher than yesterday, resulting in an accumulation day. Tomorrow's economic calendar is full, with the all important jobs data on Friday. Let's see if we can hold on to these gains into the long weekend. We need a follow through day in the next 2-3 days in order to confirm a trend reversal.

The CRM bull flag (Darvas Box consolidation) broke out on high volume today. On the 15 minute timeframe below, I left my Fibs from the earnings gap day intact. The opening range moved into the upper Fib. line. After a short consolidation, price broke resistance and trended higher. Partial profit and swinging the balance.

SU on the TSX broke resistance in early trade and trended all day. This is a swing trade in my retirement account. Preliminary target is top of triangle, secondary target will be established if we successfully BO of the chart pattern.

TCK, again the TSX chart which has much cleaner lines than the NYSE TCK chart. We closed at resistance of the trading range. I'm looking to see if we consolidate in the upper portion of today's range and then B&B, targeting the Fib extensions.