Sunday, August 09, 2009

Technical Picture - Mixed

The measured move of a chart pattern is 100%. The time element is the same as the time it takes for the entire pattern to develop to the BO point. In the case of the inverse H&S on the S&P, it took 10 months to develop (Oct. 08 - July 09), so we target 10 months to reach full extension - April 2010.

The S&P notched a new high Friday on big volume following the release of the jobs data. However, the NASDAQ failed to confirm. That's the second time in a short period of time that the NAZ failed to confirm, so I'm expecting a pullback to the blue line on 60 minute chart. That is the short-term trend. The third test of the line makes or breaks the trend. Time for a correction?

As discussed earlier this week, the MACD was way too high when the $USD tested support, thus foreshadowing a bounce. Weakness in commodities...


Day Tradr said...


What is the significance if the indexes fail to confirm each other?


TJ said...

The significance here is that it happened twice in one week. So, it foreshadows a potential change. Normally, if it happens intraday, it can foreshadow an intraday top/reversal and I look for a sell-off into the close ie. sell the one that's extended not the one that failed to confirm. So Friday, for example, the SPY tagged 102 in the afternoon and sold off into the close.

Day Tradr said...

Got it Jamie. Thanks