May 4, 2006: Cont. patterns

From yesterday's entry: "What I'd like to see for the long side: BKX above ma, NQ TD confirming bucket pattern, SOX continuing W pattern, and 3-humps on Dow failing with an upside break." Call it luck or whatever but all 4 scenarios played out and my bias was to the long side. It's good to focus on one direction which makes things much easier rather than guess work.

One can easily see that the indices after breaking out in the morning formed "Continuation" patterns. Dow has ascending channel (bearish). YM intraday triangle, ditto for BKX, NQ descending channel, and AB 30m tri b/o. This is a very interesting combination of patterns and seldom one finds all indices agreeing on 1 thing LOL... For tomorrow I wouldn't guess but would wait for first 90min to see which way they break. The patterns indicate upward movement.







Here's the "bucket" pattern I was referring to yesterday (marked in yellow).











My focus remains on trading volatility which is favoring Gold and Silver at the moment. A nice b/o trade very early on on both Gold & Silver made the day. No trades on notes. I missed a nice Euro setup but that's ok I guess...

Observation: Silver lags Gold, so when Gold b/os and silver doesn't it means a good entry on silver for a follow thru.