Inverse Head & Shoulders - Barrick Gold Corporation (USA) (Public, NYSE:ABX)

RIMM was my opening range breakout trade. Why was I watching RIMM this morning? As you can see from the daily chart above, yesterday RIMM closed near its lows, just below a key support level $45.00. This could lead to a continuation play or a snap back reversal at support.

As depicted on the 1 minute chart below, RIMM gapped up and quickly reversed. I placed my Fibs. from the ORH to the low of yesterday's closing bar. I wanted to short the continuation setup as price took out the closing lows. At first it was choppy, but as price approached the base, it carved out some NRIBs. Use last pivot high as stop (red line segment). It fell like a hot knife through butter and I exit on a hammer like bar between 100-150% extension.

RIMM support at $40.00 should bring in bargain hunters.


ABX extended yesterday's weakness in early trade and reversed. It appeared to be carving out an inverse H&S base. We can assume this as the right shoulder holds support near $37.00 (neckline) as it did on the left shoulder. I took an early entry as price formed a narrow base inside the right shoulder.

I exited half as price broke the accelerated trendline on 1 min. and was forming a long upper shadow on 15 min. I added back when original trendline held as support.

I planned to exit the trade at the same price that I shorted yesterday. Why? Because I believe that price has a memory. Many will dispute this theory, but it works effectively for me and that's all that really counts.

Failure Leads to Fast Move - Barrick Gold Corporation (USA) (Public, NYSE:ABX)

Entered ABX long on a mini base & break. Price rallied up to R2 - whole $ level and carved out a tweezer top reversal, putting the position into a slight loss. As price exit the retracement zone, I sold twice the size for a short. Failures usually lead to fast moves and that's exactly what ABX gave us. Took a partial after 3 WRBs and exit balance at S2. ABX is a usual suspect for me and I mentioned gold in last night's technical post.

Someone requested that I explain how I use MAs. I use them for support/resistance. On the 5 minute chart below, we note that price never closed above the downsloping 5 EMA until the primary target S2 was met. Price and the EMA are like magnets, so if price gets too far ahead of the EMA, expect a retracement.

Crossovers are good indicators of the bias. If the EMAs crossover above price it is very bearish and vice versa.

Opening Range Breakout - NQ Futures

M is bearish and W is bullish. The Nasdaq futures gapped down on the open and carved out a bearish M pattern on the 1 minute timeframe. Place the fibs from the ORL to resistance - top of M pattern and short the breakout. Alphabet patterns h, inverted h, and W/M usually result in fast moves. I took a partial after 3 WRBs or 150% fib. extension. The first line of support/resistance is the 5 period EMA. I was hoping it would hold as resistance, but it felt like it would give way at 1185, so I exited balance on stop. The second line of resitance is the 20 EMA and it is miles away, so best to lock in gains and watch for a second entry. Turned into a chop fest for the rest of the day as neither the bulls nor the bears, took ownership.

Technical Picture - Contraction Precedes Expansion

Futures are testing last week's lows and all this contraction in the charts is leading to expansion. So be ready for a breakout early this week, possibly tomorrow. Monitor volatility (VIX) for early signal and don't forget to keep an eye on safe haven gold stocks for long setups.

Opening Range Breakout

Traded NTAP, RIMM, POT long. NTAP and POT were sweet, RIMM was not.

Technical Picture - Consolidation

The opening range quickly set the highs of the session, which was a snooze fest up until early afternoon with a minor breach of intraday supports, followed by a reversal and rally back up close to session highs.

The markets continue to probe but hold near trendline support off of the Nov-Feb lows. As long as the indices can hold above their respective trendlines, there is potential for further retracement over the short term. However, the aggressive rejection from resistances yesterday, gives the impression that the retracement will only be temporary- another lower high. Too early to tell, but these supports could be broken sooner than later, so best to be ready.

Gap & Go - Research In Motion Limited (USA) (Public, NASDAQ:RIMM)

RIMM gapped down on lowered guidance. Price tested the round $ number $50.00 and tried to save itself, but sellers prevailed. It's hard to know exactly when to get in because the gap is so wide and the pivots are so far above price. Look for narrow range price action to develop with reasonable stop. Here I'm placing my Fibs from yesterday's close to the ORL. The OR is too narrow and the gap too wide, so I think this gives a reasonable target. But I took a partial at $48.00 to lock some in. Eventually, the 50% fib. extension was reached.

NVDA was much easier because we can key off of S2. Cover as price approaches the whole $ level.

Missed the gold stocks rally off the open - Fast moves to R2 - AEM and GG, and ABX didn't do to badly either.

HES - 2 IBs - partial at whole dollar level. There's a base at the blue line which may or may not hold as support. Morning star reversal pattern - cover balance and long.