April 19, 2006: Cnsld

As expected after a big runup day the market consolidated at the top of the range. No major surprises just predicted action. 2 quickies: one is the Dow consolidating above 11240 as mentioned yesterday; two is NQ's 'Whook' pattern with cnsld right on 1737!! Do these levels work or what? hehe... What am I expecting tomorrow? Well there's a dbl humper on Dow so that needs to be broken to upside but the move has been quite large so I'm expecting more cnsld.




This is where I spent the day trading. Gold has been on fire and I took the dbl humper setup. Ditto for the HS pattern on Euro. Last trade is the cnsld break on Notes - not the best of setups but worked out. I'm keeping it simple when it comes to those 3. 

April 18, 2006: TD

Not just any kind of TD...a monsterous one if I may add. The market was surely on fire today and there were plenty of trade setups for the taking on the long side. I was skeptical of yesterday's downmove to have a follow through because VOLD didn't support it. Today, Dow fulfilled its 'W' pattern then some more (after FOMC minutes, thanks gurl :) ) and breached two resistance levels with an anticipated equal leg move around 11320. Let's look at an interesting and very reliable pattern which is the 'arc' as highlighted on NQ chart. I spotted it real-time as it was developing and marked on the chart the 2 arcs converging before final parabolic movement. Very easy pattern to spot and play.

Since the 'oh so critical' level 11240 was taken out which is also the 'diamond' b/o level, I'd like to see cnsld just above this level before resumption of upward movement to prove it's for real...

For commodities and currencies, I took the HS pattern b/o on euro, also the dbl humper on notes, as highlighted on the charts. As for gold, I took the pullback (was expecting more though) for a short below the ma. I did miss the long setup though in the latter part of the session but I was very tired at this point. The game plan is to trade simple patterns on those 3. 

April 17, 2006: Breakdown & Retracement

Wow! what a monday! This market was definitely a mover today...plenty of trades and setups...well, let's see... as mentioned in last blog entry I expected one of the scenarios on the dow to play out which is for price to reach bottom of range (11050) and find support initiating the last leg of a 'W'... that happened after a strong selloff then a strong bounce off that level... The entire market was in sync and soldoff as well (look at all the bearish patterns).. Now let's see if tomorrow's Dow can pull off a W...breach of 11050 is considered a very bearish scenarios and confirms the multitude of topping patterns we've been seeing lately.

As for trades, I shorted the early break against ma on YM, then entered a long (salmon) and was able to get good points.. I did miss the other short.... oh well, no biggie....

As for commodities and notes, I entered 2 trades today on break of dbl hump patterns... the second one was better especially after fading weekly low which coincided with critical bond rates.. I missed gold & silver b/o which coincided with breakdown of other indices..

Other observations:
Wheat and corn correlate very well and are in sync in terms of downward action...

The patterns on gold & silver call for a pullback.. we shall see....

I have been playing around with euro in relation to other currencies such as Yen and Swiss Franc... more on that later....

In terms of the Nikkei, I put up NKD as it trades US hours but is it the correct one?? Not sure, I'll have to ask. But its action is very smooth. 

April 13, 2006: Cnsld

As mentioned yesterday I expected the market to b/o in the morning and it sure did especially the BKX, Naz and to some extent ER.

One can see why ER topped for the day as highlighted on the chart - cuz all indices hit major levels of resistance Naz 1737, ES 1300 and the Dow a prior b/o level... These tops are easier to short since there's confluence but the system I'm trading wouldn't allow it..oh well :P... There was a short entry on the Dow which was much better than ER on the short side which coincided with resistance on ADD and breakdown on NQ and ES...safe and low risk trade..

The Dow remains to be the key to this market so far, so, based on its chart there are couple of possibilities I see: 1) form a right shoulder to complete another major pattern in same area!! 2) reach bottom of range and then bounce back up to form a W..


As far as commodities the scenarios mentioned yesterday played out...Gold broke down then bounced up...Wheat and Soybeans are in bearish patterns and today continued to break down...Notes was very good and presented couple of shorts....one of them was in Globex and I'll be participating in that early part of the day moving forward. 

April 12, 2006: Cnsld

The market bounced up as expected but nothing much to talk about in terms of major moves...all indices were trading in a tight range and consolidating...

Notice the pattern on ER(AB) which is one of my favorites...very very reliable to take on the long side...Also how YM got trapped between the MA and that was the story of the day..speaking of which, the Dow cnsld against resistance (previous b/o point)...

Based on the patterns the market should b/o in the morning.. Can go either way..

As mentioned yesterday, my expectation was for a down move although there was no gap down Notes & Bonds...they fulfilled their 'V'pattern by trending down hard and I was able to catch a dbl hump cnsld break on the short side yeehaaww hehe..

Weekly hi and low on Notes & Bonds were faded.

Their are couple of patterns worth mentioning, one if the arc on Corn (geez, I sound like an Idaho farmer) and the 2nd is on Gold. They both look like a breakdown patterns.

April 11, 2006: TD

Oh boy! This is gonna be one nasty correction... the topping patterns are playing out and nothing was in sight in terms of long setups...

Nothing out of the ordinary in terms of observations... TDs are the easiest to trade...ER(AB) and YM presented excellent trade setups on the short side....The Dow brokedown from its multi-day consolidation pattern...I see a bounce based on semis pattern.

I decided to look at some other instruments, mainly bonds and notes. I also put up Grains like Soybeans, Corn, and Wheat!! Yippee.... No idea what I'm doing at this point :P... CBOT offers mini-gold and mini-silver so I slapped them on the chart too..what the heck!
Only observation of the day is the 'V pattern' on the notes which is a gapping pattern, i.e. it can gap up or down, and I say down...

April 10, 2006: Cnsld

Mondays are usually predictable... they always play games but in the end there isn't any significant advance or loss... so what happened today?? same same...

On the chart I highlighted a typical trade setup and what I normally see as the trade unfolds...

Also notice the fading of the new weekly lows on the Dow (how many did I see the market do this??)

April 7, 2006: TD

As expected, the market had a significant reversal day to the downside. Everything was bearish and only shorts were played. Breadth indicated weakness last few days so this didn't come as a surprise.

On the chart, the Dow can't get past that critical level!! Also let's look at how the weekly low got faded at noon (happens plenty of times)...

Only setup was the 3 humper on the Dow. AB had an earlier setup on cnsld break. 

April 6, 2006: Cnsld

Naz continued advancing after breaking out from the 1737 level...the entire market though consolidated and the Dow couldn't take out that critical level!!

Notice the breadth including VOLD as they're not confirming 'yet' the advance on the Naz and semis...

As far as patterns are concerned, AB30min and the semis are showing a potential leg down, porbably in the morning...we shall see.

April 5, 2006: V-day

The Naz broke out of its critical resistance level today and the semis were strong as well.... That's good news for the market on the long side. The Dow still bumping against that resistance level.

Only observation I had is a weaker breadth (Addq) as compared with the price advance on the Naz... notice how Addq never broke out of the zone all day

Battle of patterns

google41.png (PNG Image, 530x323 pixels)

This is an incredible chart formation...never seen before 2 powerfull patterns battling it out on the same level!!! A break either way is going to be very significant.

April 4, 2006: Cnsld

Nothing much to talk about other than the fact things are brewing for a battle at the moment. 1737 on the Naz was attacked today for the 100th time and couldn't get past it.

The 2 interesting patterns I'm looking at for the moment is are the BKX and Dow 30min charts where one can clearly see a '3-kings' pattern. Interestingly, this pattern's b/o is at the same levels of the 'diamond's' breakdown levels!!!
sheesh, something gotta give and this should be the best signal for an intermediate term trend. Whichever one fails will open the door for a BIG move.

That's it for today 

April 3, 2006: U-turn

"Just another manic Monday....wish it was Sunday....."... Ok, enough singing.. Is it surprising that there was a U-turn on a Monday? Most Mondays are about cnsld and this one was no different: Market came back where it started.

Now, there're things that need to be pointed out. First, the Dow is clearly having trouble with the 'Diamond' pattern as highlighted in previous blog entries and today was a confirmation of that. This is a topping pattern. The Naz couldn't close above the magical 1737 level. That's bearish too. The ES couldn't get past the 1325 level I've been talkin' about for more than a year now.

First observation is how the Dow managed to rally in the morning and complete the 'W' pattern as highlighted in the last blog entry. Usually, when the day's pattern is an 'Inverted N' the following day it'll complete the last leg of the 'W' pattern and that's what happened!

Another market observation is the divergence between Vold and the Add/Addq. When this happens it usually means chop. In all cases regardless how the charts looked, I'll just step aside and watch... Yes, watch.