May 17, 2006: Continuation

As mentioned yesterday continuation patterns were aplenty and suggested more downside & that's exactly what happened. Vold was huge and I've don't recall seeing it as these levels. The nice thing about breadth when it it's behaving that way is that one can be very confident about entries cuz they're all in 1 direction. There's no temptation to countertrend.... BKX, Semis and ER acted as I expected them to.

There was one nice short entry on tri-break in the morning and that was really it.

For tomorrow I'm watching the Dow since it reached what I think is the bull final stand. This is the area highlighted between yellow lines and has given grief to bulls & bears few months ago. The 2 scenarios are highlighted in red and that will be what I'll be monitoring in addition to the cnsld pattern on NQ.



I can just write volumes about today when it comes to trading Gold...Ok, so there're certain things that seem to be working on metals as well and one of them is the previous b/o points so that's good :) Look at where Gold topped for the day and a prior b/o also.

This is where I took my trades in addition to the tri topping pattern. This is as clean as it gets in terms or price action. Also had nice trade on Euro on the long side but didn't participate on the short side, why??




Ok so for tomorrow it gets pretty interesting. Looking at the 120 I see a major triangle forming so that indicates a possible upside for tomorrow till it hits the TL. It it doesn't by breaking the lower TL then an ABC will form with a measured move.





For Euro I also see an H&S forming which is a topping pattern. Right now it's the RS that's forming above the neckline so that might suggest more upside tomorrow.