Wednesday, February 23, 2011

Technical Picture - Market Slide Continues

The market slide continued today as the "buy the dip" mentality has suddenly disappeared in the face of institutional selling or distribution. The Nasdaq chart above clearly depicts strong selling over the last two sessions. However, we are close to breaching the lower BB and short-term capitulation selling would be an opportunity for a bounce.

On the flip-side we have huge gains in gold, silver and oil. I'm monitoring gold and silver for euphoric price/volume action as these sectors over-heat and in need of short-term corrections.

Copper is another commodity of interest, as we approach trendline support and the lower BB.

Last night we talked about the Ags for a potential oversold bounce as most of the widely held names were coming in for a test of support. Also featured in HCPG newsletter last couple of nights for added confidence. As depicted on the daily chart above, CF corrected well beyond the lower BB.

On the 15 min. chart below, we see that price/volume capitulated after breaching weekly S2 (tweeted at 12:12 if you were able to decipher the spelling error). The recovery was slow at first and normally, when stocks capitulate, I expect a V bottom. However, patience paid off, because once price manged to break above weekly S2, it went vertical. I took a partial as price approached the downsloping 50 SMA and exited the rest at the next resistance level.

Similar trade in POT in my swing account. Here I waited for price to form a base before jumping in. My target on the swing is the unfilled gap. I will add to the swing if we retrace some of today's gains. Stop at BE.

BTW, NYSE POT 3 for 1 split on Friday.


Day Tradr said...

Love your market analysis. Thanks for all the hard work. Made some nice dough today in SLV and USO short.

john said...

Traded my ass off on Wednesday ...had a nice day. Then I saw your tweet late day about your fine entry on CF. If I was a nicer person I'd have heartfelt congrats for you.

Hope you'll settle for begrudging jealous congrats instead.

Jamie said...

Day Tradr


Jamie said...


I'll take it. Congrats on your nice day too.