Technical Picture - Neckline Break on High Volume

Neckline break of H&S top on high volume. On a measured move basis, target SPY 116.

TUP bear flagging. Looks ready to go tomorrow.

Technical Picture - Consolidation - Markets Mixed

We had little in the way of catalysts during the trading session, to move the markets, hence we printed inside days. After hours TXN announced bid for NSM at 70% premium over closing price. This prompted buying in SMH and more specifically in names similar to NSM such ADI, MXIM, ISIL, and LLTC.

We'll see if the euphoria carries over into tomorrow's session. At the moment, the S&P futures are ticking down as depicted below. Support in the 1320-21 area looks good and I would be a buyer, notwithstanding negative news.

QCOM forming bearish wedge. Prelim. target $50.00. QCOM popped after hours on TXN/NSM news, but I doubt it will hold for long.

Day Trades

ALXN - Fib. retracement trade

TCK - Traded in my swing account. TCK is on my short WL of Canadian stocks (mostly commodities). TCK formed a bullish flag on 5 min. timeframe. I took a partial at full extension and swinging the rest. From the daily chart above, we see an inverse H&S pattern basing for a BO. Full measured move will bring us back to highs and beyond.

RHT formed a nice flag pattern (tweeted by Independant trader). Exit after it formed a bearish tweezer top, because it just didn't have enough profit at that point to partial and ride it through.


RIMM - shorted break of PDL and it snapped back. What else is new? I keep trying the same bear flag BO trade and keep getting the same result. I was getting a little discouraged, but deep down, I knew it was going to break eventually. So I sat back and placed my Fibs from Friday closing handle to opening swing low and waited to see if anything developed. Price rallied to 1.27 FE, carved out some bearish long upper shadows, and fell back into the retracement zone. So I decided to short again as price broke out of the Rzone. Finally, lower prices. Took a partial at weekly S2 (1.62 FE). Price then retraced sharply, sort of forming a triangle into the close.

Not sure what to expect tomorrow. Felt there wasn't enough volume on this move lower, to risk a swing on the second half, but I will get back in if we break $53.85.

Technical Picture - Modest Gains on Favorable Jobs Report

INDU is testing February highs. I'd like to see a retracement here so that we can carve out an inverse H&S pattern, before attempting to move towards the top of the channel.

Small caps are testing 2007 highs.

The SPY gapped up on the favorable jobs data, but a mid-afternoon swoon brought us back to the base. Black candles can be bearish as they highlight gap fades. I'm interested to see if new money will come into the market as we begin a new month, or if we get some sort of constructive retracment before attempting to make new ground.


My main concern is the NASDAQ which has yet to confirm the price action of the other major US markets. We saw late day selling in AAPL (20% of the QQQ), weakness in a number of cloud names, and the SMH appears to be falling out of bearish rising wedge with volume (see SMH chart below COMPQ). Also, copper, a leading indicator, is printing lower highs. These are red flags. The broader markets can't continue higher if the COMPQ fails to confirm and pulls back.

Watch List Stocks

AAPL looks vulnerable to further selling. Friday's late day sell-off had volume. If it fails to hold the retracement zone as support, it will likely retest the base (blue line).

ALXN is testing $100.00 resistance again. Large scale buying into the close, pushed the stock just above $100.00. I would prefer to go back and fill the gap before breaking out, but ALXN might not wait.

ISRG attempting a big level here. Breaking out on good volume. I'd like to see a few days consolidation (coiling) in the upper shadow of Friday's stick, before moving above $350.00.

RIMM bear flagging, closed near lows on Friday. If the BO closes below next support at $54.60, I'll hold for a swing. There's virtually no support between $54.60 and $50.00 as we had two WRBs on the BO of the base back in October. That's why I find this setup so compelling.

AKAM setting up a mini inverse H&S pattern. Measured move target 100%.

RVBD looks like it might be forming a H&S top.

FFIV - The Fibonacci symmetry on this chart is a thing of beauty. After gapping down on earnings, price retraced to the ambush zone and the downsloping 50 SMA and extended to the Fib 1.27 level. We retraced to Fib 1.0 and now it looks poised to extend further. $80.00 seems like a realistic target, if FFIV fails to hold the 1.27 level.

Day Trades

GES caught my eye on the open because of the gap up. I placed my fibs from the late day handle to the opening swing high and waited to see if it would set up a reversal in the ambush zone. It did, so I took it for a long. My target was the high of the earnings gap down bar on the daily (blue line) on the chart above.

VRUS was a gap continuation play. If we ignore the opening range, we see an orderly base on base setup. My target was $81.00 which represents a full measured move on the daily. (See Thursday's post).

I thought the third test of the support zone on RIMM would finally break, but there some large buyers sitting on support and I took a small loss. Price rallied back towards the 5 day EMA, carved out some bearish looking upper shadows, formed a base and broke back down, so I shorted it.

Technical Picture - Tech Leadership

The markets gapped up on the open, the SPY probed its 50 day SMA and faded. Once the gapped was filled and prices stabilized, the bulls regained strength and pushed prices back up. Leadership was provided by tech including casinos, disk drive, internet, software (RHT earnings) and semis, in other words, a broad based tech rally.

As depicted on the SPY charts above and below, the market is extended in the wake of the rally from last week's lows. We have wedged our way back up to the short-term downsloping trendline and a pause here would be good. Rally has been on lower volume

Economic data - GDP in pre-market and Michigan sentiment at 9:55.

Copper has retested broken trendline and we will soon see if this is a dead cat bounce or not. HG_F look like they are forming a topping pattern, basing just above 430.

GDX profit taking took hold this afternoon after the big move from the lower edge of this symmetrical triangle. No surprise given the overbought bias.

Biotechs setting up a solid base here. This defensive sector looks poised for a BO soon.

Biotech sector names - I like CELG - solid base forming after testing long-term support.

CEPH (not depicted) just won its FENTORA patent suit against WPI.

AMRN if it regains $8.00.

GES Bear flag on daily. BO point is $37.50 as long as it doesn't regain its 5 period EMA (orange line on 15 min. chart below.)

Day Trades

FOSL - was hoping this would wait and set properly, but it based at $85.00 and eventually broke for a quick scalp.

JDSU gapped up, consolidated and broke above 5 day EMA.

RIMM was a good day trade into earnings, but after hours, it fell out of favor on weak guidance.

Key supports in play are mapped out on daily chart above.

Technical Picture - Minor Gains

Markets gapped down on chatter regarding European debt and Mideast worries. Weak new home sales data at 10:00 added to the pressure. Prices stabilized shortly thereafter. By afternoon prices trended higher. The NASDAQ and DOW notched new short-term recovery highs, but the SPY didn't confirm. Still, today was the first trend-like day since the recovery began.


GDX (gold miners) forming a symmetrical triangle as it tries to catch up with GLD

GLD forming bullish inverse H&S pattern.

SMH wedging or flagging.

GES bear flagging following last week's earnings/guidance disappointment. Target gap support.

FOSL basing at resistance. Needs to consolidate after three consecutive higher closes.

LNN forming a small handle at base.

LRCX - watching to see what price will do when it fills gap. I suspect we'll rally back to $56.00 before reversing back down.

ITMN basing, looking for higher price.

Day Trades