Technical Picture - Backing & Filling

After four consecutive higher closes, the markets gave back all of yesterday's gains. Bad data and weak earnings prompted the lower volume retracement. Financials lead the way down. Little on the plus side except Gold.



Wasted effort on this SNDK strategy to add to the swing trade on a break of the PDH. Ended up dumping the whole thing when the markets failed to bounce off of early weakness.

Missed the first leg up on ABX. After gapping and testing the PDL, ABX squeezed back up to the PDH, consolidated and extended 50% in the afternoon.

Base and break the NASDAQ futures. I was a little too confident of a gap fill lower and stayed in the second half too long. Should have had a stop at the 50% fib. level, but I didn't.

Technical Picture - Stimulus Induced Breakout

The market broke out of the box with a gap open and extended into midday. After a sideways drift, the market established new session highs prior to, and shortly after, the Fed, before succumbing to some choppy profit taking followed by a late push into the close.

Triggering the broad based push off the open was word that the government is working on a plan to help banks dump toxic assets. This would help banks protect against losses stemming from asset write-downs.

Broad based rally with Finance pacing the way + 13% and gold/silver on the losing side.

Opening Range Breakout - Barrick Gold Corporation (USA) (Public, NYSE:ABX)

Both ABX and GG carved out the h short setup in the opening range. ABX filled the gap from last Thursday-Friday, but GG did not. We talked about ABX filling the gap a couple of days ago.

ABX set up a second entry - long out of an inverse H&S type pattern.

SNDK swing long as discussed over the weekend. Perfect inverse H&S on the 3 minute timeframe. I partialed ahead of the FED, swinging balance as per chart below.

It so much easier to find good setups when the markets BO. Easy setup on the Nasdaq futures.

Snooze Fest Edition

Opening Range BO - AMGN - formed a mini inverse H&S pattern which failed and set up a short. Minor extension. AMGN spent most of the day trying to recapture the 200 DMA. Maybe a better trade tomorrow.

Nasdaq futures were choppy most of the day, but when they retested the daily high and were forcefully rejected, it set up a short opp. Most of the profit came through after the cash market closed at 4:00.

Kicking myself for missing my beloved RIMM - nice momo move today.

Interesting Article on Day Traders

Being A Day Trader

Ordinary investors may flee the market’s dizzying ups and downs, but Peter Milman and his kind hang on tight while riding the giant waves of uncertainty. There’s nothing more exhilarating than to catch the perfect surge.

Technical Picture - More of the Same

The markets were unable to sustain early strength following the better than expected existing home sales and leading indicators. S&P and Nasdaq both took out recent range tops, but DOW did not. This non confirmation led to a full retracement, followed by 50% bounce back to end the day modestly higher. Financials were once again the weak link, and this is starting to feel more like a bear flag than a box play.




As anticipated $USD moved back below trendline and into the wedge.

Trade Setups for tomorrow:

MS and GS testing trendline support. If they break, we can expect a nice retracement back to pivot areas.


ABX - another name testing its trendline on 15 min. Could be a good for a gap fill.

Opening Range Breakout

Place fibs from early pivot high/low and trade the opening range breakout (ORBO) or pullback to the R-zone.

Recently, most of these trades generate 50-100% extension and retrace, because the markets are range bound and can't get any traction.



Planned Trade:

After the Breakout Trades, I look to the 15 minute timeframe for some higher quality setups that have a better chance to run. Yesterday I posted this chart of RIMM.

And today, after the initial test of the PDL, it retraced to the R-zone, but couldn't close above Fib. 50%, so it was just a matter of time, before it fell back down.

Technical Picture - Whipsaw Week

The market is trading in a box and whipsaw was the theme of the last three sessions. No need to trade until the box is broken. Hard to make money on non-trending days.

After three consecutive lower closes on the weekly, I favor a pause or snap back rally. But the markets are jittery and highly sensitive to the news and earnings of the day. Stay nimble.




Agchem also a box play. Looks and feels like it wants to make a move towards the base. A lower USD would help this sector. I favor POT as the move is in play with Friday's breach of the $74 pivot.



Gold is strong, but needs to consolidate the big move.

USD will retrace or reverse. $CAD already made a big move Thurs. & Fri. against the greenback.

Oil looks ready to move higher out of a well shaped H&S bottom. Keep some oil names on the focus list. I'm watching CNQ, ECA, SU, OXY.

Financials are consolidating after a retest of the Nov. lows. Lots of charts looks like BAC below. If this breaks to the upside, it could be a sizable move. Keep a few names on the focus list and get ready to jump in.

Click on charts to enlarge and read comments.

SNDK daily and RIMM 15 min. I like the strength in these two names if tech can do something this week. SNDK in play as long as the trendline holds as support.

A Couple of Trades

ABX - low risk entry at base of PDH. We talked about this one a while back.


Two scenarios on the POT trade - C&H or NRIB. We talked about this last night, so hope most of you caught it.

Technical Picture - Consolidation

Whipsaw was the theme of the trading day. The markets gapped lower on a combination of key earnings misses from MSFT and others, more banking woes, and weak economic data. Prices opened in the Fibonacci R-zone and slipped lower, but then buyers started stepping in. Prices chopped around the mid-range and finally ripped higher to close the gap. As soon as that was accomplished, they moved back into the mid range.

Clearly we've broken the downtrending channel, but there's so much resistance overhead. Not sure what awaits us tomorrow, leaning towards more consolidation, notwithstanding any major negative headlines.

Earnings Gap - Apple Inc. (Public, NASDAQ:AAPL); Potash Corp./Saskatchewan (USA) (Public, NYSE:POT)

AAPL and POT were the 2 earnings gaps that I was focused on this morning. Both had huge earnings beats and both guided lower. POT gapped lower and squeezed vertically making it hard to get it. Luckily it paused and briefly consolidated just above the $70.00 level, . My preliminary target was $74.00 pivot point level. I was going to swing the second half but decided to bail EOD because the trading day was so all over the place, I'm not sure what to expect going into tomorrow.

AAPL gapped wide despite the negative opening market sentiment. I place my fibs from the ORH to the early pivot low and entered long as price paused at the cusp of the R-zone. Price retests and holds support of the ORH on a closing basis and easily reaches the next fib. level.

Price retraced and found support at the base of the R-zone. The second test of this level gave me confidence to enter a second time.

Keeping both of these names on the focus list for tomorrow along with a couple of other Canadian names mentioned in the HCPG newsletter tonight.

MS has retraced 62% of the January slide in just two days. The trendline is steep and momentum declining on today's thrust, but a good name, along with other broker dealers (GS and JPM) to keep on the WL near-term. Some good charts here.