March 18, 2005: CNSLD

After close analysis:

This is Opex and usually means chop (no trading today). Well, market got some of that in afternoon after breaking down earlier. I was expecting market to hold but it didn't. This doesn't mean that I expect more down on Monday. As a matter of fact, I still think we'll have a healthy bounce to the upside next week... we'll see. Should be noted that Vold didn't have a huge down volume which makes me think we're due for a bounce to the upside. Will ignore Dow and AB in terms of TA, but will keep an eye on Semis, NQ, and ES for clues.

Observation(s) of the day: Today was a day of patterns. So many intraday patterns should've provided excellent clues for 'PA' and setups. Very important to understand and track what these patterns look like and mean in terms of giving an edge for next move.

Market breadth was -ve from the get go. Vold, Add, and Addq all opened below previous day's range. The 7-bar hi/low study on Vold still shows nice b/o levels. Addq/Add also showed a nice 2/4-bar breakdown: excellent confirmation for a short setup. All 3 are about to have +ve xover.

Futures consolidated in morning before breaking down in afternoon then experiencing a late day reversal to the upside. NQ broke down from a multi-day horizontal channel then reverted to some chop till end of day. ES formed a triangle in the morning before breaking down as well. As for AB, it formed a triangle with "selling pressure" all over it before breaking down. The afternoon reversal up was met with ema resistance. AB's range wasn't that great and still choppy, but it's Opex so that was kinda expected. ES200R amazing chart shows price bumping against ema resistance - still bearish.

Indices were mixed today: Semis consolidated all day after an early morning spike down. Sox/Smh are trading in a descending channel which means a break to the upside can be expected. Dow on the other hand had 2 interesting patterns: first, one is the 3-day horizontal channel which was taken out to the downside. Second, there was a 'waterfall' pattern that took place all morning which formed on the bottom of the horizontal channel and eventually offered a short based on breakdown. These are very important patterns to watch for intraday trading.

Overall neutral day!