Tuesday, May 10, 2011

Tecnical Picture - Bounce Extends

The market has retraced 62% of last week's slide on lighter volume. As depicted on the the 5 min. chart of e-mini futures below. Last Friday's jobs report gave us a wide gap, but formed a bearish rising wedge which eventually led to a complete gap fill. Monday's action was inside, and today we were finally able to extend beyond Friday's high.

SLV has filled the bearish gap more or less, but the bounce has been lame in terms of time and volume. It took three sessions to retrace one day's losses. Very choppy intraday action - not my cup of tea.

USO has retraced 38% of its slide, but needs to push up to 62% in order to fill bearish gap.

$USD is consolidating after breaching downsloping trendline.

Most of my morning trades were scratches but the afternoon trades turned things around. I have been keeping an eye on RIMM's decent. Today, it breached $44.00 for a minute or two and then snapped back - head fakes usually lead to good trades in the opposite direction.

RIMM is technically oversold (daily RSI below 30) and was a good candidate for an oversold bounce (short squeeze).

Enter long on break of NR7 following head fake. See the volume spike as price takes out the obvious resistance levels (blue lines). This is where the stops get triggered and the squeezes occur. Keep on WL for follow through.

CTSH looks well positioned for an attempt at a gap fill following last week's earnings gap.


timo4sho said...

Hi Jamie,

could you please elaborate on your trade management on that RIMM trade?

What made you not take a partial at the first or second resistance (blue lines)? Did you watch the 1 minute timeframe when price reached a possible resistance level and managed the trade based on what you saw on the lower timeframe?

Thanks for clearing it up!


Attitude Trader said...

Hey Jamie,

Just want to thank you again for posting your ES charts. There are very few, in any, ES charts/traders out there that I want to see/study - too many indicators! :) - and X isn't doing it any more :( , so it's really nice to be able to see what you did in comparison to my own trades. Also makes me see how many different ways there are to look at one market even using the same basic tools!



TJ said...


Yes, I used lower timeframe, but it was more than that. It had a lot to do with psychology. It was a scratch morning and the psychology on the RIMM trade was all or nothing if you know what I mean. I knew it had to break through the higher resistance levels in order to really squeeze.

TJ said...

Welcome AT,

The bulls got ambushed today. The way I had my fibs and trendlines placed on ES worked out well again today.

Attitude Trader said...

Definitely a short-selling party.

Re Fibs and trendlines: Yes, especially that trendline. That was the thing that got me on the right side of the move.