Friday, March 18, 2011

Technical Picture - Inside Day on Lower Volume

Index futures rallied overnight on positive news regarding Japanese nuclear situation, however the Asian and Europeon markets still closed red. So when the U.S. markets gapped up on the open I was a concerned about chasing longs. The broader markets outperformed on strength in commodities. Tech rose 0.7% and small caps just minor gains.

I still have 1/4 swing positions long in TCK and POT which I will sell tomorrow. As we can see from the copper chart below, the technical bounce to retest the broken trendline is almost complete.

After hours, the G7 announced that they had agreed to intervene with Japan to suppress the yen causing the currency to correct and the Nikkei to pop along with S&P futures.

SMH is in the support zone, but buyers aren't enthusiastic.

Couldn't resist one last trade in SU as depicted above. I exit as soon as the daily gap was filled.

EXC gapped and fell back down to retest yesterday's lows. It based sideways for a long time and I decided to try a low risk long after price had regained the 5 period EMA.

GES gapped down on earnings and ripped lower. When selling subsided, I took a low risk long hoping for a retracement back to resistance (blue line). There was no momentum on the retrace so exit as price approached whole $ level. Price backed off immediately and bears took back control. Notice the topping pattern on the 1 minute chart below, sets up a nice short into the close.

Optical stocks FNSR, OPLK, and OCLR were crushed today. JDSU is bear flagging, and I suspect if the sector continues to sell off, JDSU could fill the gap from $20.00 to $18.00. On the other hand, given today's blood, we might head fake lower and bounce. I'm leaning towards the latter for tomorrow, but won't be surprised if the stock sells off on the next market leg down.

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