Technical Picture - Bearish Topping Candlesticks

The chatter in pre-market was that the market was anticipating good jobs data next week and would likely continue to rally into those numbers. The first half of the session supported that idea, but early afternoon was hampered by another weak auction and more headlines out of Europe regarding aid to Greece which popped the greenback and melted the markets. At the end of day we have a lot of shooting stars and bearing engulfing sticks.



POT attempted to BO of a solid base on the open but faltered. This was followed by choppy trade and a series of lower highs and lower lows, eventually setting a low risk short on the 5 minute timeframe below.

Technical Picture - $USD Breaks Out

A stronger dollar, weak data, and a weak 5 yr. auction all contributed to backtracking in stocks.

The BO in the $USD was impressive and will be a factor in the stock market rally if it succeeds.

Today sector pressure was noted in: Gold Miners GDX -3.9%, Silver SLV -2.6%, Health Provider -2.5%, Semi SMH -2.3%, Crude Oil USO -1.9%, Gold GLD -1.9%, Biotech -1.6%, Retail -1.4%, Healthcare -1.3%, Telecom -1.1%, TRAN -1.3%,. Groups on the plus side - insurance and banks.

GLD looks poised to retest its trendline on dollar strength.

Technical Picture - New Recovery High

A mixed start on Tuesday with choppy base building persisting well into the afternoon before a late day run to fresh new 52-wk and recovery highs. Thus Monday's retest of the base was successful and we rally on. The lack of volume implies few bears ie. no short squeezes as the bulls party on.

Gap Trade - PRGO

PRGO opened with a wide gap and immediately took out the ORH. Volume = momentum on these wide gaps and since PRGO's volume is strong, we want to get in.

Since there's no identifiable chart pattern, move from 15 min. to 5 minute timeframe to find a suitable entry point. Price consolidated in a narrow range close to 5 EMA so I entered long. Place Fibs. from previous day - late day lows ie. beginning of last leg up - to ORH and target a Trader-X style extension.

As long as the stock continues to carve out higher highs and higher lows, we can be hopeful of further extensions. After exiting the initial trade, we wait to see how price consolidates. Price consolidates in a narrow range on low volume (price/volume contraction ahead of expansion).

Place buy stop order just above the highest point of the consolidation base after two pivots into the base. The third test of the base is the anticipated BO point as depicted on the two trades below.

Technical Picture - $USD Strength Weighs on Energy/Commodities

A choppy mixed session of little consequence to the overall bias. Dollar strength weighed on energy/commodities and if it continues, we could get more of a pullback. As depicted on the NASDAQ chart above, at this point, the markets are pricing higher as momentum weakens.


From the 15 minute chart of POT above, we see that it is a relatively easy read with respect to support/resistance due to the gaps. Wednesday's gap was filled in early trade, but price carved out inside bars ready to break to the downside. The NRIB was the trigger. After the initial swoon, price paused at the guidance gap support from last week...more inside bars and that level failed as well. Finally the trade was stopped out. From there, price retested former support, now resistance.

I've mapped several areas of support for a buying opp, but the full gap fill would attract a lot more buyers IMO.

As discussed last night, the RIMM swing trade was in peril. Early strength was attibuted to an analyst target increase. But that didn't last long. I exited half at $75.00 and was stopped out as soon a price breached yesterday's low.

Technical Picture - Overbought

Tonight's HCPG newsletter points out that today's action leaves the SPY with 14 days of consecutive higher closes. The SPX chart above shows that price barely paused at resistance before breaking through. Volume on the BO is average, so there was no short squeeze in play. Are investors too complacent? Since we didn't pause at the base, we should expect a retest.



The RIMM swing trade is in peril. Price closed below 6DMA and the rounded top looks very bearish.



Daytrade - GMCR formed a bullish flag pattern, but didn't reach full extension.

Potential H&S Swing Trade

GOOG has a H&S pattern with support around 556. That support level happens to coincide with the 50 day SMA. A measured move down would test the range/support levels formed in February. This scenario is more likely to play out if the broad market starts to sell off from the current extended (upside) levels.


Update: The charts below (30min and daily) show what happened with the H&S pattern. After forming a more complex right shoulder and testing support several times, GOOG gave a good test down (yesterday and today) into support as shown on the daily chart. A sharp reversal from that level brought it back to the H&S breakout level by today's close. The test down did not achieve a full measured move (height of the H&S pattern), but it was a good move down in an overall bullish market. The possibility still exists for achieving the full measured move before trading above the H&S pattern, however the strong reversal today lessens that chance.

Technical Picture - Markets Mixed

New 52 week highs in early trade following retail sales data, but Michigan sentiment was below consensus and prices retraced, spending the rest of the session in a sideways chop. As we can see from the above chart, prices are testing resistance and a period on consolidation would be healthy at this point.

The $USD succumbed to weakness Friday, finally closing on the trendline.


POT gapped into resistance on guidance. We have a volume spike which should lead to a swing long as soon as prices consolidate the move.

CLF gapped after JPM raised their target price to $83.00. I set a buy stop order just above the pre-market high. Resistance at $65.00 so I'm going to wait for a pullback or consolidation before swinging long.