Monday, October 04, 2010

Technical Picture - Broad Based Selling

After the initial choppiness, bears took control and broad based selling ensued. As we can see from the SPY chart above, the bulls were able to defend last week's lows as support. However, the bears were effective in keeping the price action contained for most of the afternoon.

As discussed in last night's post, the $USD was testing support vs. Euro testing resistance. Today, the $USD bounced, weighing on commodities and gold miners. Crop futures were weak in pre-market putting further pressure on Agribusiness names. Early strength in financials finally gave way. Little was in the green except Casino, and REIT IYR.

Watching to see if today's lows will hold. If not, expecting a complete fill of the Tepper gap will attract buyers.

AGU - short the break of Friday's lows. Partial at gap fill and cover balance at support. Corn futures bounced today. I didn't take the counter-trend trade. Instead, I'm waiting for an ambush setup in the 50-62% fib. retracement zone of the last leg down at point 5 on the chart above.

TSL - Short break of ORL on the baseline - solar sector weakness in early trade.

The AAPL trade setup as planned, but didn't extend as planned. Price stalled on the minor support line and wasn't able to follow through in the afternoon. Notice how price reverses each time it hits the downsloping 50 SMA (green line). I expect more of the same tomorrow.

GS formed a bullish morning star reversal pattern at the full retracement of Friday's range. Entered long above 5 day MA (orange line) which is flat. Took a partial after a half point because the markets were so weak.

MON - still flagging. I want to short MON below $47.50 for a target trade to $45.00 support (July lows). On a related note, MOS missed earnings by $0.05 and trading lower in AH.

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