Monday, October 06, 2008

Inverted Cup & Handle - NASDAQ E-mini futures

Both of these trades are inverted C&H patterns off of the 1 minute time frame. The first chart is the NASDAQ E-Mini futures. I went short on a NRIB with volume contraction. The target was 100% from the high of the session to the BO point. As you can see from the chart, the target was well exceeded as price capitulated just shy of the 1.62% Fib. extension. Once the huge red capitulation volume spikes were offset by the green one, it was time to get long for a retracement trade.

Huge volume spikes which are outside the average range indicate either accumulation (green) or distribution (red). If you suspect a stock has capitulated, look for these types of volume spikes for confirmation.

AEM was a perfect inverted cup & handle- nice vertical swoon into the target. Sweet!

8 comments:

Tyler said...

Jamie,

Great trades as usual! I have been checking your blog all weekend and am glad you posted today. I always look forward to seeing your charts.

Also, thanks for checking out my trades.

Thanks,
Tyler

Anonymous said...

Hey Jamie,

Nice trading in the NQ's! This volatility is creating great daytrading opportunities. Unfortunately, since putting much of my retirement money "back to work", my daytrading can not balance those daily losses. What can you do but grin and keep on trading. We shall see if this late day hammer action leads to a decent bounce.

Jamie said...

Thanks Tyler,

Yeah, I wanted to post last night, but just too tired after a busy weekend. I was anticipating another Black Monday type scenario especially after reading what was going on in Europe.

Jamie said...

Hey Jim,

I hear ya. I thought I had picked the bottom in gold a few weeks back, but had to sell when ABX gapped down on Thursday creating a bearish island reversal.

Hopefully, tomorrow will see some high volume, follow through on the late day bounce. I'm ready to start putting some cash to work.

QQQBall said...

yuou da man, brotha! nice trading and then flipped it over too. very nice!

i;m definitely less attuned to the inverted C&H... but i love where AEM bounced.

Jamie said...

Thanks QQQ,

Yeah, AEM had a sharp rally from the $40.00 round number. I look forward to some follow through tomorrow in some of the oversold names. Plan to buy RIMM above $60.00 for a swing retracement trade.

bl said...

Jamie,
Was AEM a WL one? I bet there were alot of premkt -5% stocks at which point I would think it easier to go off a short say 25 WL or ETF's rather than wading through a 500 list after open scan stocks and mired down in a hunt. Thoughts?

Jamie said...

BL,

Yes, AEM is a WL stock. I haven't really been scanning for gappers since this whole mess started. There's always multiple gappers on the WL.