March 31, 2006: 'Inverted N' day

Nothing much to talk about today...the market is choppy..

Notice the potential for a 'W' pattern on the YM based on 'Inverted N' pattern, other than that the Dow is still weak and certainly that 'diamond' pattern shouldn't be taken lightly.

Only hope for this market to breakout to fresh new highs is the Naz.

March 30, 2006: Cnsld

Some things are getting clearer than others... take the Dow, it's clear that the diamond is major resistance like it was mentioned in yesterday's entry... it's clear that AB is the strongest of all markets, amazing! It's clear that ES is hitting resistance and it won't be easy for it to advance.

What's not clear whether the Naz will be able to break through these levels and have the follow-through on the '3-kings' pattern. If it rallied today past its morning high the story would've been much different, but for now the pattern isn't confirmed..simply, today's hi needs to be taken out and a close above it will confirm the 'very bullish' pattern.

As mentioned yesterday, the BKX didn't participate in yesterday's advance and that can explain today's action.

If we look at the semis and Naz, most likely there'll be a move down tomorrow based on thep pattern...after that who knows :P 

March 29, 2006: TD (day after FOMC)

As if nothing happened the day before! MOC (market on crack) hehe... Only thing I didn't like about today is the BKX which lingered below the ema and didn't participate. The Dow is hitting major resistance after the breakdown from the 'Diamond' pattern. Most important thing to watch for though is the '3 kings' pattern on COMPX cuz this is gonna signal a major b/o to the upside worth 150-200 points on nq! 

March 28, 2006: FOMC

Geez! That wasn't called for... and just like that the market tanked with the Dow breaking the 'diamond' pattern, now that's significant!

2 interesting patterns I hightlighted on Semis: 1) the slanted H&S which is always bearish, no fakes here, this is a reliable pattern. 2) the 'rising W and a handle', and that's also a b/o pattern that's easy to trade: just place the entries above or below the handle.

Only thing that held above its ema is AB. Tomorrow should be interesting cuz it's usually the next day or 2 after FOMC is when we get a TD. 

March 27, 2006: Cnsld

Nothing much to talk about here other than the fact there's chop. Notice the distance between the W legs on the semis....that's called symmetry. 

March 24, 2006: 'N' day

Classic 'N' day as shown on AB chart so did other indices. Note the heavy cnsld (highlighted by an arc) not to be mistaken w/bullish cnsld. The worst a bullish cnsld can do is hold its ground and trade sideways, but if it gets heavier and heavier like trickling to the downside then it is most likely followed by a blowoff to the downside.
Interesting diamond pattern on the Dow and I believe a break out of it will decide whether it makes a new all-time high or this is the top!!

The semis cnsld sideways as highlighted in previous session's blog and today it tested the first triangle pivot successfully. Now there's a multi-day wedge forming as highlighted in red. Either the W is completed to the upside or is broken to the downside. Either way the semis will either support the market's breakout to new highs or this is the TOP for a long while.

Speaking of wedges there's also one on the YM and that trapped today's movement in the market. 

ER 1-2-3?

Interesting pattern forming here... are we close to a top? 

March 23, 2006: Cnsld

The market didn't do much other than chop. That isn't surprising considering how VOLD behaved all day. One of the things I look at is VOLD when it is trapped between pivots that is usually a signal to take quick profits (very important rule) versus wait around to maximize gain - hit and run. Other breadth indicators also met resistance and that put a cap on any rally attempts.

The arcs on Dow in particular resulted in a retracement as mentioned in yesterday's post, but not so much on AB as it consolidated. It's important to understand the underlying patterns and implications.

The semis are offering an interesting scenario where they had a dbl triangle basing pattern today - that makes the case for a bullish scenario unless pivot of bottom triangle is taken out and a consolidation takes place below it. So far that hasn't happened so there is a good chance that semis will attempt to form a W and b/o or breakdown and breach the lower boundaries as highlighted in chart.

Naz couldn't overcome the resistance line highlighted in previous blog entry and MA acted as resistance. ES didn't fare any better and also had MA act as resistance.

March 22, 2006: Mini TD

Many observations regarding this session:
- Dow did recover prior session downside action by following a V-dip pattern as mentioned in yesterday's post.
- Breadth was strong and a healthy bounce to the long side above pivots.
- AB 30min has an arc so I'm expecting a pullback.
- Naz is against resistance, this is the level to watch.
- Possible W pattern on Semis, and that requires symmetry so if it materializes some cnsld will be needed before going up.
- BKX (banks) had a higher low at the same time AB had dbl bottom resting on MA which was a very good setup on the long side.
- YM was a better trade on the long side since it was above its ema.

March 21, 2006: U-Turn B/O

As mentioned yesterday I was expecting a b/o of sort today based on the 4-day cnsld pattern above gap. Boy, did the market do that or what? Yes, there was an earlier b/o then the market just tanked!! I wouldn't panic and start addressing the short side yet since I see a V-dip reaction to the upside, as shown by arrow on Dow chart. No observations other than ER & YM closing below their 200ma. 

March 20, 2006: Cnsld

Nothing exciting today except it's a Monday, and the probability of anything other than cnsld on Mondays is pretty slim-myresearch over the last few years shows that, only exception when there's extremely bullish market action when Mondays are just a continuation of a strong Friday. Ok, so today is the 3rd day of consolidation above the gap on YM as I have it marked on the chart, so I'm expecting tomorrow's session to be the 4th day where there should be a b/o in either direction, and that's a typical pattern dating back a few years when I started tracking patterns. BKX is a very good indicator of market action and it was bullish following early drop in the morning especially in afternoon. The Semis don't look too hot especially with SOX not able to get over the 500 level, and I expect a breach of the horizontal support line on the chart even if it's for a dbl bottom. The Dawg & SP are about the only thing that just took off



NAZ has a major basing pattern that can lead to another 200 points to the upside - that's if it HOLDS! I call this pattern the 3 kings. If you want to see a similar one go check the March 2003 bottom on Dow, it's an amazing pattern dating back to the 1920s during depression

March 17, 2006: Cnsld

Typical Friday churn and consolidation. Nothing to talk about that much other than the Dow and SP still hovering around their b/o highs which indicates strength. Everything today indicated neutral action so best not to trade.