Technical Picture - Markets Mixed

The markets gapped higher after China decided to put off its interest rate hike. The $USD had a sharp retracement sending commodities higher. The DOW which has been lagging, finally breached the November highs, but sellers took control of the close, sending prices back near BE and a mixed finish (tech and small caps finished in the red).

BBY earnings miss $0.07 and downward guidance is weighing in pre-market. However, PPI and retail sales were favorable. The FOMC rate decision at 2:15 EST is highly anticipated. I'll be watching to see how the $USD and GLD react.

The $USD uptrend in intact, but yesterday's sell-off leaves the door open for further downticks. I'm watching to see if supports will hold as prices push back towards the ambush zone, and if the RSI will hold the 40-50 levels.

MA from the HCPG newsletter, was the best trade of the day as depicted below. Next levels of resistance are outlined on the daily chart above.

SOHU Fibonacci retracements in play are $68.73, $65.91, followed by $62.33.

NFLX Fib. retracements in play are $181.00, $176.40, followed by a gap fill at $173.00

Technical Picture - Bears Own It

Overnight futures rallied on news of Obama's compromised tax legislation. As the markets were setting for the open NQ futures broke out of a bull flag, but S&P and DOW did not confirm. Both the S&P and Nasdaq opened at fresh highs not seen since Sept. 2008, but the DOW failed to open above the Nov. 2010 high. Non-confirmation usually leads to reversals. The gap was faded with volume, hence a momentum move to the downside, followed by, the usual midday chop. Prices retraced back to the ambush zone, at which point, the bears took back control and crushed prices down to the 62% FE in the last hour.

As depicted on the S&P chart above, today's sell-off was on big volume. The intraday action was highly predictable just by studying price/volume and the candlestick action in the ambush zone.

The bears controlled the open and close and expect some follow through.

After watching Zortrades Monday night show on stocktwitsTV and studying the charts I was inspired to be bearish again towards gold and silver. Prices on some of the charts had traded outside the daily Bollinger bands for 2-3 days in a row and needed to correct. All we needed was a gap open.

The gap open was my cue and I shorted AEM, SLW, and CNQ on the open. The AEM chart below was my favorite. SLW almost identical. CNQ was slower, but eventually succumbed. After locking half, I'm swinging all three. Watching today's midday retracement highs to hold as resistance on the swings.

ONXX was a gapper. After it established support in the upper range of the opening gap, I entered long on break of NR7,or probably NR5. The opening range is too wide, so I eventually placed my fibs at the base of the cup. Markets were too weak and the C&H BO failed, but the early entry allowed for a good profit.

CTRP, another gapper, offered a good ambush trade, but I missed it. Instead, I took it long after a nice basing period at $46.00. Took a partial when it felt like it was stalling, and exit on the 62% FE.

A few stocks on my Focus List

AAPL - The third pivot in to the baseline is usually the charm. Failure here should retrace at least to the ambush zone.

LVS - Mentioned this one in my last post. It started to BO of the bear flag late in today's session.

NFLX - 60 minute chart - perfect ambush on the open. Look for NFLX to make lower lows, at least to gap support, and most likely to gap fill. As long as the RSI holds the 50-60 zone as resistance, the stock is weak.

WatchList: RVBD, LVS, INTU, CSTR, OVTI, AAPL

RVBD - has held in the upper range of recent rip. Bull flag developing and could BO anytime.

LVS - Filled prior gap and sold off on high volume. Looking for further weakness.

INTU - Looking for retest of recent highs and possible extension to 1.27%

CSTR - Bull Flag developing in addition to Friday's NRIB NR7. $65.00 looks like a good spot.

OVTI holding earnings gap - Darvas box type setup.

AAPL - Last but not least, NRIB NR7 at base of pre-earnings high. As noted previously, AAPL has yet to close above its pre-earnings high of $319.00. Now, it is basing at $319.00 and looks ripe to resume the uptrend. Weekly timeframe has formed a bull flag.

Technical Picture - Stocks Surge on Positive Data

The bulls were encouraged by favorable data out of China overnight and the best ADP report on private sector job creation in three years. Equities gapped higher on the open and rallied into midday breaking through the two week bearish flag top to end the session well above the 1200 psych level. Volume lagged so the new uptrend is unconfirmed. What a difference a day makes!

The rally was broad based with all major sectors participating. The leaders were coal, housing and steel... Tomorrow's economic data includes jobless claims as a lead in to Friday's all important employment report.

Click on chart to enlarge

RIMM stalled and reversed after filling the May 19th gap as depicted on the daily chart above. Volume was above average but less than yesterday, so it's too soon to tell if this is distribution. Keep a close eye on it tomorrow as the 15 minute timeframe looks like it has carved out the left side of a H&S top.

Where is Gold headed and how can you prepare?

The gold market has been pushing out its normal level of frustration and anxiety for the past several weeks.

So the question becomes, is the gold market pausing to move higher, and of course the Bulls would argue this, or is it forming the head and shoulders top that many technicians are looking for?

Click here to register for MarketClub's free live gold webinar Thursday December 2nd at 4:00 P.M. EST.

Technical Picture - Nasdaq Weakness Weighs on Broader Markets

For the second day in a row, the markets gapped down on fear regarding potential eurozone defaults. The SPY and DIA were able to fill their opening gaps during the course of the session, but the Qs didn't confirm, leaving the door open for weakness into the close.

As we can see from the S&P emini futures chart above, we had a rounded top form on China tightening and now we have a lower high, also with a rounding effect from eurozone debt default and Nth/Sth Korea. Rounded tops are bearish signifying over supply. Every time the bulls try to push higher, they are met with an unending supply of sellers. Hence, the market has no choice but to continue correcting until the supply/demand re-balances.

I shorted NQ futures in to close as depicted below. Covered half after 10 points, and holding overnight or stop 2125.

NASDAQ monthly chart below, ends the month with a spinning top, which usually leads to near-term weakness.

$USD is approaching resistance at 50% retracment level. It's too strong now. Any pause will likely be relatively shallow and short in duration.

The GLD/Euro decoupling is still in play. GLD and Silver mining and retail provided leadership in today's session.

TLT bottomed, formed a base and is now retracing.

OIL looking weak after today's shakeout bar.

Internet sector forming bearish flag. Not surprisingly, we'll continue to see profit taking in this overbought sector. SOHU broke out of bear flag today. GOOG weakness on Groupon deal. Look for BIDU, AMZN, AAPL to follow.

AMZN ready to fall into gap support.

SNDK flagging at resistance.


Other stocks to watch tomorrow FFIV NR7, GMCR failed BO.

Today's trades - Long RIMM ABX on the open in my Canadian account. My TWS platform had issues so these were missed trades in the trading account. Short TTM and NQ futures.

Technical Picture - Minor Losses

Equities were weak in early trade as the European debt situation and instability in Korean peninsula stoked the fear index. However, stocks staged a late session rally following the open market operations which allowed dealers to unload some $9 billion in treasuries. Leadership was provided by Oil, metals, and financials. Laggards included solar, retail and biotechs.

E-mini futures have weakened and given back most of the late day gains as I write this post.

Looking forward to tomorrow, the last day of the month...will we close above 1200?

The percentage of stocks trading above their 5o MA has deteriorated 30% since peaking in October.

The Euro has retraced 50% of the June-Oct. rally in a relatively short period of time. Now I expect a small bounce back up to retest the broken trendline, however, the European debt crisis is far from over.
GLD and the Euro were fairly well in sync since Sept., but now we see a decoupling taking shape. This should be followed closely as it will impact the H&S top we've been watching develop on the GLD chart.

The best trade today was AMRN in pre-market. As I tweeted in pre-market, Amarin's AMR101 meets pivotal phase 3 study endpoints with highly statistically significant reductions in triglycerides and we had strong pre-mrkt volume.

I added to the position after it broke out of the handle. I exit when the price bars failed to turn red on a higher high, implying relative strength was abating.

The late day rally was a low volatility breakout after an extended period of choppy trade amid really low volume. I missed the actual BO because I was busy trying not to nod off during the snooze fest. Went long as the flag broke and took it to the full extension.