Tuesday, February 22, 2011

Technical Picture - Bears in Control

The first chart is a wide range view of the S&P emini futures. We note yesterday's trendline breach and close near LOD. Today we gapped lower on accelerating mideast tensions and inflationary fears out of China (gold, silver, oil gapped higher). The gap was quickly filled, however, if we zoom in on the next chart below, we see that price couldn't close above the 5 day MA (orange), and hence, the downtrend resumed.

Next support zone is 1309-1305. Next resistance is around 1325. If this is a bona fide correction, I would use the downsoping 50 SMA on the 15 min. timeframe as a guide. In other words, it should hold as resistance just like the 5 day MA did this morning.

The Ag sector continued to correct again today. As we can see from the 30 min. chart of POT below, we achieved a full measured move on the H&S top.

On the POT daily timeframe, we have a broken trendline, but we do expect price to retest the trendline and fill the gap. Keep an eye on grain futures (wheat testing support zone). Once they stop bleeding, we should get a tradable bounce in the Ags.

POT day trade.

Also, traded AGU.

I still have my eye on JDSU. I'm watching the gap $23.50 - 23.00 for a support trade.

TCK was a nice short out of the bear flag pattern, but now it's approaching a support zone, so we want to keep it on the focus list for a bounce.

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