Not all stock links will work as some of the aforementioned stocks
have been removed from my public list.
Aug 31st: Some
nice volume on a series of bullish candlesticks in each of the markets.
Whether the volume was short covering following the morning sell
off, or fresh buying remains to be seen. If it was true buying we
should see a decent rally tomorrow, any weakness would suggest todays
rally was driven by shorts who will start to re-establish positions.
Overall, the markets held up well to negative
consumer data. The question is now, can it build on it?
Aug 30th: Brief
update, gold patrons should have received their stockpicks for tomorrow.
Markets started their pullbacks today, which will likely to run
into Friday and the jobs report. We should see a return of the volume
and the end of vacation trading at this time. The Republican party
convention will keep traders off the floor so don't expect too much
excitement this week. The disconnection between oil prices and stock
prices was evident by the failure of the markets to rally following
today's drop in oil prices by $1.
Watch the US dollar
index, should this break 90 it will be bad news for precious
metals and precious metal stocks.
Aug 27th: The
week ended higher on some very light trading. Today's limp GDP
figure was not enough to inspire (or kill) the market, so look to
next week's job report as the potential catalyst for a volume reaction.
I would still like to see a retest of August lows - there isn't
the buying volume to suggest a 'V' like bottom. This test should
be short and sharp, perhaps lasting only 2-3 days, I would be more
wary of a slow decline at this point. Friday could be the day we
see a washout. The NASDAQ
ended the week below key resistance, although technicals continued
to rise. The NASDAQ
100 inched a new weekly high, but couldn't maintain the high
at the close. The Dow
closed above resistance of the close of the last reaction high (but
not the last intraday reaction high). The S&P
finished slightly better, closing above the intraday reaction high
of early August. The Russell
2000 also had a positive day, but the Philly Sox
continues to lack confidence and this weakness will eventually come
back to haunt the tech indices. The volatility
index actually looks set to gap down on Monday (bullish for the
markets) - but the concern for this is a likely bounce off support
that should coincide with a market correction. Longs need to remain
metals finished down, marking resistance points in precious
metal related stocks. Traders should sell gold and silver stocks
close to, or at, resistance (eg HL
and look to buy these stocks back on the next test of support. Given
the light trading there was little action from individual stocks
featured on my list. Penny stock, GZFX,
traded some heavy volume on plans for a new advertising campaign.
ended on a bullish engulfing pattern following NASDAQ compliance.
continued its advance on the back of strong earnings.
Penny stock, GTEL,
bounced off support on heavy volume following a company AGM
Breakout failures: JUPM
featured on Aug 20th and Aug
Breakout targets met: none
Aug 26th: Light
trading ahead of the GOP
convention will lkely make for erratic, sideways trading as
market makers remain on the sidelines, while retail and value buyers
duke it out with the shorts. The NASDAQ
continues to struggle below major resistance of the triple bottom
at 1,865. The bearish harami cross (today's similar open and close
lie inside the range of yesterday's open/close) is weakened by the
lower volume (a bullish parameter on a lower close). Slightly better
is the NASDAQ
100 which is trading above the May lows, but finished today
on a bearish harami cross. The Philly Sox
remains the weak link in the chain, trading at support, but as yet
to make a run to upper resistance - no tech rally can last without
this index in motion. This is contrast to the Dow
which are working towards their June highs having breached two-month
resistance yesterday. and showing all three technicals in the green
today. The volatility
index looks to have reached a short term bottom after 8 days of
downside. At best, the market will move sideways here, but an increase
in fear could see a short, sharp, shock over the next 2-3 days that
will shake the last few of the weak hands out, and trap new short
sellers, thus confirming the bottom. This will be the time to buy.
Puiblic list stocks making moves
hit hard on an earnings loss.
look to be completing a double top, selling off on heavier volume
today. While ELGX
started a fresh breakout on heavier volume. OPSW
ended on a bullish hammer as it continues to trade on high volume
between $4.80 and $6.20. PSYS
benefitted from an analyst upgrade,
but this was not enough to stem the flow of sellers, closing slightly
up for the day after a strong gap open. TASR's
leap of faith following a new $1 million order
was not enough to keep it from finishing near the day lows.
Breakout failures: none
Breakout targets met: none
Aug 25th: Mixed
bag of ecomomic
data; a rise in durable good orders, but a drop in home sales.
But to what degree is the latter affected by a squeeze on the availability
of materials - is there more demand than the figures suggest? We
are starting to see some degree of divergence in the markets. The
2000 and S&P
are leading the current rally, albeit on light volume. The tech
100 are being dragged along for the ride, but are kept back
by a weak Philly Sox
which has done little over thle last couple of weeks to suggest
demand for tech related issues. The lack of overall volume may be
less of a concern given August is traditionally a month of light
volume trading, but there needs to be more meat in the pie to sustain
this rally into new 52-week highs. A more positive aspect to today's
trading were the upside breaks of intermediate consolidation wedges
in all markets. Traditionally, such moves retrace the entire wedge
- which would bring markets back to levels last seen in ealy July.
Technical strength is improving, with market technicals moving to
new near term highs in the MACD tirgger line and slow stochastics.
The bias is definitely bullish, but it is not the time to 'jump
in with two feet' - dip the toes and test the water, but be ready
for the tidal change..
Breakout failures: RVTIF
featured on July 23rd.
Breakout targets met: TZOO
featured on Aug 17th and Aug
Aug 24th: No
update today due to time constraints. Gold patrons will have received
their stock picks for tomorrow
Aug 23rd: Markets
consolidated last weeks' gains, althoujgh late afternoon selling
favors further retracement tomorrow. The markets opened on weak
a lack of consumer spending will further pressure this nascent rally.
Certainly short term traders would have taken profits from the lack
lustre trading. The NASDAQ
finished on a bearish black candlestick (higher open, lower close,
but close higher than prior day's close), and the NASDAQ
100 closed on a doji (similar open and close). The Dow
remained caught at wedge resistance with bearish cloud cover (higher
open, lower close, but today's close above Friday's open). Volume
in all markets was lighter than Friday's - a bullish sign, and the
did close higher - returning above support of the downward channel.
stocks weakened as profit taking swooped in on recent bullish
prices ended on a bearish harami cross - a strong reversal signal
at overbought levels. There were few volume movers today. QCOM
added another 2% on average trading, but overall volume for Friday's
breakout remains light. DHB
gapped up on average volume, but has only scratched the surface
of the post-earnings sell off, still plenty of work to do here.
finished on a bearish inverse hammer on low volume, but closed above
its breakdown gap - net neutral. OMNI
break of resistance on Friday ended today on a bearish engulfing
pattern on slightly heavier volume. OVTI
completed a bearish shooting star on heavy volume, look for a retracement
of its recent bull run.
Aug 20th: The
100 closed above resistance of broadening wedges on light volume.
A sharp intraday reversal in oil
prices helped maintain the weeks rally, in conjunction with
triple witching, adding to the volatility. Yesterday's bearish
haramis and hanging men were negated in all markets based on today's
close. The lack of volume in each of the market rallies is a concern,
with only one accumulation day on below average volume to show for
the weeks work. Technical strength is improving, suggesting the
52-week lows made during the prior week are significant support.
This is supported by bullish moving average crossovers in the secondary
Longs should be looking to the next pullback to add to positions,
but buying close to major resistance (the triple bottom in the the
100) will leave one vulnerable to whipsaw. The Dow
are approaching the last reaction highs, 10,150 in the Dow, and
1,108 in the S&P - so look for a dogfight at resistance, both
markets sit at, or below, resistance of broadening wedges. The Philly
index remains vulnerable, having failed to close inside the declining
channel, but the Russell
2000 is showing resilience, with new reaction highs in the MACD
and slow stochastics.
prices smashed through $409 resistance, although the MACD trigger
line failed to confirm the breakout and gold
stocks are short term toppish, closing at resistance of large
triangles (eg. see HL).
was a real flyer in late afternoon trading. ATPG
followed through on a channel trendline break, but volume was light
and technicals remain weak so bulls shouldn't get too excited. CMN
broke trendline resistance of its own, but did so on weak volume,
although technical strength suggests there should be a test of the
52-week high at minimum (MACD trigger line over zero, slow stochastics
over mid-line). QCOM
burst to new 52-week highs, catching many shorts unawares, although
overall volume remained light. There was no stock related news to
account for today's move. Similarly, DHB
lept above a bearish wedge, but the spinning top implies plenty
of indecision on the part of bulls and bears - low volume and poor
technicals suggests the bears will take control next week. LEXR
lept over 10% as recent tight trading favored the bulls - the stock
has taken some hard hits of late, but was relatively immune to the
August wipeout, it closed at $6.05. GI
followed through on a bullish wedge breakout on light volume, significant
resistance remains at the double top around $25.50. OMNI
broke $4.00 resistance, and followed through on a modest volume
spike following some heavy volume trading at the start of August.
is currently undergoing some decent accumulation having bounced
off support of a strong bullish divergence in the MACD trigger line.
Not all stocks were winners.
looks to be a decent short play - as it confirmed a bounce off prior
Market leaders like steel producers may be approaching the end
of their run, ZEUS
did not benefit from the weeks rally, remaining below significant
resistance from a gap down. Similarly, OS,
failed to move to new 52-week highs. Watch for rotation to new market
Breakout failures: none
Breakout targets met: none
Aug 19th: Markets
stumbled into resistance as the Google
IPO stole the show. Markets finished on bearish reversals as
marked by the haramis (todays open/close inside yesterdays), or
hanging men (difference in todays high and low is greater than twice
the difference of todays open/close). Volume came in lighter than
yesterday - a bullish marker, so should markets close lower tomorrow
it will also be important for volume to decline to keep the uptrend
intact. Monday will be the real test of the rally as options expiration
will no longer be a factor for another month. Bearish haramis were
marked in the tech indices, NASDAQ
100. Bearish hanging men occurred in the Dow
Secondary indicators $BPCOMPQ,
continued to rise - another tick in favor for a bottom in the market.
stocks were the real winners today, but look overbought in the
Aug 18th: Only
a brief summary today - but gold patrons should have received their
newsletter. Today marked the first day of accumulation in the markets,
although it should be tempered by options expiration week. The real
test of this rally will be next Monday, but we can speculate that
last week was the bottom and next week should see the confirmation
of this bottom (and a good opportunity to go long if selling volume
is light). As in previous rallies of this ilk, markets have stumbled
as they approached the initial reaction high following the break
of the prior trend, which for the NASDAQ
is around 1,925, 10,0150 in the Dow,
1,435 in the NASDAQ
100, and 1,108 in the S&P.
Tomorrow could see some further upside, but if the real body (ie
the difference between the open and close) is small, then the chance
of a reversal back to last week's lows increases. On a positive
note, secondary indicators [$BPCOMPQ,
crossed their 5-day moving averages - a bullish marker. Now it is
time to watch for bullish divergences with respect to the market
indices (if markets make new lows, but secondary indicators fail
to confirm these lows with new lows of their own).
Aug 17th: If
yesterday gave hope to the bulls, today would have taken it away.
The morning gap did little to drive an enthusiasm for buying as
oil prices crept
up. Bearish shooting stars (strong white candlestick the previous
day, gap up, todays inverse hammer) in the tech markets signal a
move back to last week's support. It will take a close above today's
highs to negate the bearishness of the shooting star. Volume was
higher in the NASDAQ,
100, but for the last 3-days it has remained well below average.
The breakdown gaps held - another bearish marker. The Philly Sox
completed the third day of a weak rally but remains below resistance,
further pressuring the tech indices. The Dow
broke out of its "box" and closed above resistance, but
the inverse hammer is bearish as 10,000 failed to hold at the close.
Similarly, the S&P
struggled at prior support of 1,084, ending on a bearish inverse
hammer. The $NAA50
continues to hold bullish divergences in MACD, RSI, and slow stochastics
which still favors a major rally at some point in the (immediate)
future. So, although bearishness is indicated for tomorrow, a bullish
undercurrent is likely been driven by value players.
prices completed a bullish 3-white-soldier sequence of candlesticks
as it edged towards resistance. KGC
broke resistance of a recent 3-week consolidation on rising volume,
closing with its own 3-white-solider combination. A similar sequence
appeared in SIL.
Although in SSRI
the pattern was followed by a bearish harami (open/close of today
inside open/close of yesterday).
swung back to the bears as it closed at three day lows on above
average volume following yesterday's higher volume reversal. ASE
is creating its own bearish wedge on very weak technicals. AMW
completed a bullih morning star, but watch resistance at $0.90.
shed 10.93% as it moves to retest its triangle breakdown low of
$3.36, it closed today at $3.91. DHB
ended the day on bearish cloud cover - returning control to the
bears and the big gap to $9.30 to close. The ERES
relief bounce looks complete following today's failure to close
over $20.00. OS
eneded the day on a bearish inverse hammer. MTZ
dropped below support following the resignation
of 3 directors. PSYS
resumed its downward trend as the MACD trigger line dropped to new
6-month lows. Penny stock, ECGI,
lost $0.40 support continuing an lengthy decline.
Breakout failures: none
Aug 16th: Relief
bounce or bottom? The drop in oil
prices and positive outlooks in retailing
were factors driving today's upswing. Oil prices ended the day on
a bearish harami which should be bullish for the market, and lead
to a retracement in oil prices back to $42.50 a barrel (oil closed
at $45.69). On the negative front, volume was lacklustre, a reflection
of vacation trading? A rally in the NASDAQ
100 is likely to stall at the breakdown gaps, which loom large
overhead. The Philly Sox
index wasn't quite the party maker which the main indices enjoyed,
and remains the doubting Thomas in an otherwise good day for the
tech indices. The Russell
are battling support/resistance of a 7-day consolidation, the break
of which will determine the direction of the markets into September.
prices broke resistance which should benefit precious metal stocks
over the coming days. The metal closed at $405, just $5 shy of important
$410 resistance. Silver
prices remained $6.80 resistance, watch for an upside break tomorrow.
added to its triangle breakout, ending a bullish 3-white soldier
completed a bullish piercing pattern on higher volume, but future
weakness in oil prices should restrict the bounce to the sub-$10
traded on heavy volume as it attempts to follow through from its
July breakout. HDI
broke a bullish flag on light volume, but needs to close over $60.00
to suggest it can challenge new highs, it closed today at $59.51.
ended on a bearish inverse hammer, resistance at $2.30 is thwarting
any attempt at a rally and a retest of $2.01 looks favored at this
continues to map a bear flag, look for downside to continue. DHB
closed at resistance on light volume, but completed a bullish piercing
Breakout failures: none
Aug 13th: Markets
traded flat for most of the day on light volume as oil
prices added another dollar. The widening deficit
further stressed the market, weakening the dollar, but strengthening
metal stocks, gold
Unfortunately, market technical indicators, like the MACD, ticked
down, suggesting today's trading was little more that a blip in
the decline. Bulls will look to bullish haramis as potential reversal
signals (todays open/close range inside the open/close range of
yesterday), but the lack of volume does not suggest this will come
to fruition (watch futures
for leads - a gap up would provide some hope, but markets would
have to close over Thursday's highs to confirm the reversal). The
uptick in the ADX indicator (a measure of trend strength) of the
index, suggests there is more bad news to come. This will impact
negatively on the tech indices, NASDAQ
100. Only the Dow
closed above (5-day) support, having breached it intraday, but the
lack of volume (and the tick down in MACD) does not suggest much
demand at this level. The Russell
2000 looks similarly bleak.
Although oil prices rose, energy
confirmed yesterdays pennant break by shedding over 6% on above
average volume. AAC
gained 10% after releasing its earnings.
managed a bullish harami cross with slightly higher, but comparatively
average, volume to yesterday. JDSU,
ended with similar chart patterns, but todays volume was significantly
less than yesterday's. SIRI
held yesterday's support of a bullish tweezer bottom, but still
has plenty of work to do to begin a rally. ECOL
small rally died a death on today's bearish engulfing pattern. IDEV's
rally looks similarly imperiled. AMW
capitulated its recent declines, closing down 11.54% on heavy volume,
watch for relief bounce on Monday. ERES
broke a rising wedge to the downside, shedding 10% in the process,
there was no stock related news to account for the decline. IVAN
found some support after its sharp retracement, gaining 12%. Penny
continued its bounce after yesterday's bullish piercing pattern,
closing at $0.26, $0.07 shy of the week's high. OPSW
eased an additional 3.6% as it inched towards yesterday's hammer
support of $4.60. It closed today at $4.82. Penny stocks, MOBL,
all performed well, while ONEV
broke support to the downside.
Breakout failures: OIS
featured on August 4th. TLPE
featured on July 20th. UNM
featured on August 6th.
Aug 12th: Strong
retail earnings from Wal-Mart and Target were overshadowed by the
tech wreck of HPQ's results.
However, Dell brightened the picture after hours with a strong report,
up after hours. What this will do for the markets remains to be
seen. Watch the NASDAQ
for a test of 1,780 tomorrow. A short covering drive could bring
the composite back to 1,800 as we near options expiration next week.
Whether we have a bottom in place will depend on the up volume.
Similarly, watch the NASDAQ
100 for a test of 1,330 tomorrow and a rally to 1,345. Technicals
in both these indices continue to tick down, but a bullish divergence
is apparent in the MACD histogram (but not the trigger line, which
lost support). Unfortunately, the Sox
took another hit and does not appear to have bottomed. The Russell
2000 closed at a new low, negating a 4-day support level. The
cling on to 4-day support, but both look to have completed bearish
falling-3-method continuation signals.
There was little joy on my public
stockchart list. ATPG
closed below support of its pennant with decreasing technical strength.
closed its breakdown gap, ending on a bearish engulfing pattern
on low volume. INTC
closed lower, negating any reversal potential of yesterday's doji.
lost support of $3.30. SUNW
sits at support of its declining channel. ATEA
lost 29% as it crashed through support following its earnings release.
accelerated its losses to the downside after weeks of tight trading.
ended the day on a gravestone doji at resistance, completing a relief
bounce off $3.36, it closed today at $4.44. DHB
sits poised to drop into its breakout gap, closing just above $12.50
shed 5% as it inched towards $12.50 support, but todays move confirmed
the breakdown from the triangle. PSYS
initiated a relief bounce; a large bullish engulfing pattern on
light volume. SIM
closed its breakdown gap, but ended on a bearish cloud cover candle.
On the positive side, IDEV
gained in the run up to earnings next week, the last three days
counts as a bullish three white soldier combination, but volume
was light. SIRI
lost another 5% but closed above yesterdays lows, leaving a bullish
tweezers bottom. Look for higher prices. OPSW
capitulated on heavy volume, ending the day on a bullish hammer,
place GTC buy orders between $4.60 and $5.00. Penny stock, GSPM,
ended on a bullish hammer on higher volume. A second stock, NMKT,
gained 40% on strong earnings.
Aug 11th: Earnings
were the worry of the day, with oil prices a lurking background
threat. Potential bullish hammers in the tech indices, NASDAQ
100, were overshadowed by the collapse in the Sox
index. Volume was higher which suggests todays lows should have
merit as support, but the Philly Semi-conductor index will dictate
if the lows will hold. The gaps in the tech indices from last week
are likely measuring gaps for the decline (the July gap was the
breakdown gap), if these pan out then lows of 1,580 and 1,280 can
be expected in the NASDAQ and NASDAQ 100 respectively, However,
1,768 in the NASDAQ, and 1,274 in the NASDAQ 100, are the 38% retracement
level for the move off October 2002 lows which should contribute
to support (1,531 and 1,087 are the 62% retracements). The Dow
held the bear trap after dipping below 9,910 support in morning
trading. The S&P
2000 ended on bullish hammers, closing in the upper range of
prices eased below $400 which had a corresponding knock on gold
were similarly depressed. Obviously, CSCO
was the big loser of the day, but stocks on my public list were
mostly quiet. Weak (shortable) bounces are occuring in ANIK,
reversed yesterday's bounce but still holds the breakout gap. INTC
ended on a doji close to support with a bullish divergence in the
MACD trigger line. LU
gapped down from support. SIRI
completed a capitulation on a bullish hammer. ECOL
completed a bullish engulfing pattern following yesterday's bullish
hammer, but technicals continued to tick down. AMW
broke its triangle to the downside on modest volume. IVAN's
black candlestick is a bearish marker and favors a move to $1.22.
crashed back to support of $0.18 having reached a high of $0.33
Breakout failures: FCN
featured on July 28th.
Aug 10th: Markets
rallied in light of Greenspan's "measured" interest
rate hike, but the lack of volume (although higher than Mondays
=> counts as accumulation), and the traditionally disappointing
released after hours will see a stiff test of market resolve on
tomorrow's open. Things to watch for tomorrow are a test of last
weeks breakdown gaps in the tech indices (1,820 in the NASDAQ,
1,353 in the NASDAQ
100), volume in all markets - assuming it will be a down day
it should come in lighter than today to suggest a bottom is in place,
and a move above major resistance of 1,092 in the S&P.
managed to regain 9,910 level on higher volume, marking a potential
bear trap should this level hold tomorrow - a bullish buy signal.
continued to hover close to support of the declining channel, and
the bullish divergence in the MACD sets it up nicely for a catapult
rally. The secondary market indicator, $NAA50,
continues to hold its bullish divergence with respect to MACD and
the RSI, and at 355 is close to lows for this indicator (250-650
is the range of prior trough lows, 141 was the all time low for
this indicator). If fear spikes (volatility)
tomorrow we could be looking at the final washout of the weak hands.
There is certainly value out there to be found.
The majority of stocks on my
public list rallied. Those doing so on volume were SNIC.
The stock survived an analyst downgrade, but also, gained on news
deal. The stock closed at $14.32, up 13.38%. ECOL
ended the day on a bullish hammer, but the technicals do not indicate
strength. Look for bounce to $10.00 before supply issues kick it
back down. GI's
afternoon conference call didn't help the stock. The large bearish
cloud cover suggests downside will continue. TASR's
black candlestick on higher volume suggests supply remains a concern,
which likely favors a break of $25 at this point. Todays rally was
inspired by new
weapon orders. Penny stock, UDW,
bounced off $0.95 support lows, ending the day on a bullish harami
on modest volume. Watch for upside tomorrow.
Aug 9th: Markets
prepared for tomorrow's Greenspan comments and 0.25 basis point
rate hike. But today, oil
fears kept a lid on any rally, although the NASDAQ
2000 finished on bullish
harami crosses (a strong reversal signal), with the NASDAQ
managing a traditional bullish
harami. A gap up open tomorrow would give a strong indication
of a bullish turnaround - watch futures
for leads. The volatility
index added weight for a rally Tuesday or Wednesday by closing on
a bearish black candlestick - look for a drop in fear over the coming
days. Bullish haramis were evident in all three market tracker stocks,
The only bearish note to these bullish formations was the lack of
buying volume - this should be rectified tomorrow on a strong morning.
Buying a break of todays highs in each of these markets would be
an aggressive long signal - although a retest of any breakout gap
is likely over the coming weeks (an opportunity to add, or to take
a lower risk position).
Given the sideways action in
the overall markets, there were plenty of stocks making moves. The
mining sector looks good value here as the underlying base metals,
rallied. Best value appears to be in stocks like CDE,
Although oil prices rose, energy related stocks look to be entering
relief bounces, for example, ATPG
failed to build on Friday's bullish inverse hammer - closing slightly
down for the day after opening higher. CMN
attempted a bullish piercing pattern off support, but technicals
remain very weak - suggesting the move is a relief bounce. SBAC
failed to hold a bullish doji, closing decisively lower on higher
continued to plummet after its failed break of $10.00, it closed
today at $7.23. HDI
begun its relief bounce after recent declines - today's volume was
light, and if it continues in this vein it will again be short candidate
at $60 - technicals are horrible. KNGT
attempted its own bounce, but closed below former support of its
rising wedge. SNIC
ended on a bullish harami cross, the stock is heavily oversold and
due for a bounce back to $17.00. Similar bottoms look in place for
the security issues, VISG,
ran into resistance at $2.00 as it reversed sharply following it's
held support of its former breakout gap. It is an aggressive buy
with stops on a loss of todays lows. SIRI
continued to suffer following XMSR's
shed a dollar to close at $9.38 following last weeks breakdown from
a symmetrical triangle. Technicals remain very weak here. Penny
rallied to an intraday high of $0.33, but ended the day at $0.28
after some very heavy trading. ZEUS
held breakout support on low volume. Technicals suggest the bounce
will be a relief bounce to close the breakdown gap at $23.00 before
the price rolls over for good. Longs should look for higher volume
in the rally if current holds, or new positions, are to be maintained.
Todays breakout failure was
RI featured on July
16th - this stock actually hit its stop on Friday. There were
no breakout candidates for tomorrow. The oversold rally should bring
some up. Shorting failed breakouts remains the best short term strategy.
Aug 6th: Fear
selling was rampant as yesterday's breakdowns followed through on
heavier volume. The woeful jobs
report pulled the rug from bulls already skittish from rising oil
prices. Bulls were left biting their nails in the hope of an
island reversal next week, looking to the secondary indicators as
a marker for a bounce [$BPCOMPQ,
The sell off in the markets carried similarites to that in March.
The declines in the Dow,
mapped the declines from January highs and if they repeat we should
see a rapid rally to close the gap, a return to new lows, and then
the election rally everyone is looking for. Should the gap close
and the market maintain a close above this gap, then the election
rally will have begun. Too early to say - but a move to close the
gap on Monday or Tuesday looks the best short term play here. The
100, and Russell
2000 closed outside of their lower Bollinger bands (1,801, 1,339,
and 525, for the NASDAQ, NASDAQ 100, and Russell 2000 respectively)
- a traditional aggressive buy. The Sox
closed outside of its declining channel for the first time, but
bullish divergences remain in its MACD and slow stochastics.
Plenty of losers, few winners.
On the plus side, IVAN
added to yesterday's bull strength on heavy volume. Penny stock,
made further inroads towards $0.51 resistance on rising volume,
it closed today at $0.28. ATPG
attempted on a bullish inverse hammer at support, but volume was
finished lower, but ended on a bullish doji, move stops to todays
closed on a doji, perhaps forming a double bottom - selling into
the second bottom was lighter than the first, a sign of seller exhaustion.
The Dow tracker stock, DIA,
sits at a meeting of two key support levels, an aggressive buy is
favored here. Unfortunately, the stories of the day were the losers;
lost support of its wedge - suggesting worse to come, KNGT
crashed below its rising wedge, this could trace the entire move
followed through to the downside, sitting just above $74.50 support.
broke its recent congestion to the downside, next target for this
stock is $61.20, it closed today at $67.55. SUNW
moved to new lows, negating recent support of a double bottom. DHB
reversed its bullish break of an ascending triangle, setting up
a bull trap and a favored move to $10.00. DGII
moved from a breakout earlier this week to a breakdown today. MAGS
lost support of its rising window, there is still one support level
at $11.76 left, but todays break is likely to be significant (as
resistance) on any rally from here. OS
broke support from its ascending triangle - look for a move to $12.32
at minimum, and potentially down to $9.05. OVTI
gapped down below support, look for move to lower trendline. PSYS
broke its sideways congestion to the downside, target for the break
is $18.00, it closed today at $24.01. TASR
recovered from its recent sell off at support, but a larger bearish
triangle remains. UDW
reversed its recent bounce, $1.03 support was lost, only $0.95 support
Further breakouts toppled. ACO
which featured twice on Aug 2nd
reversed its breakout - leaving "trapped bulls". AIT
featured on June 15th crashed
through its stop after reaching a 52-week high of $33.00 ($1.64
short of target). CHTT
featured on July 16th hit
its stop. JOYG
clipped its stop on a large doji. It featured on Aug
hit its stop after an earlier "bull trap", it featured
on July 30th.
Aug 5th: What
went down to help the markets yesterday, reversed sharply to kill
them today. Oil prices
went from technical bearish yesterday to technical bullish today
as shorts were forced to cover. The increase in volume and the lack
of a measurable pullback has the makings of an exhaustion run in
the commodity. This is short term bearish for the market (other
than energy related stocks) and should bring the capitulation the
market craves. The spike in fear ($VXN)
contributed to the panic. Tomorrow's jobs report will likely be
overshadowed by oil price pressure over the coming couple of weeks.
100 closed at new yearly lows as technicals turned back to the
downside. The breakdown negated a bullish head-and-shoulder reversal
pattern in the NASDAQ, and a triple bottom in the NASDAQ 100. The
good/bad news was the lighter volume, which can either mean more
downside until we see a capitulation, or a sharp reversal on higher
volume to mark a potential bear trap. If the latter is to come true
it will need to happen within the next couple of days with a close
over 1,830 in the NASDAQ, or 1,368 in the NASDAQ 100 - the jobs
report is the bulls best hope - and even then, a bullish followthrough
on higher volume will be needed within the next 2 weeks. In this
environment, cash is king. No index escaped the selling wrath, the
all threatened support, but remained above May lows - if only just.
Some bulls will look to the Sox
for support as it remained relatively unscathed from todays downdraft.
Secondary indicators, $BPCOMPQ,
continue to map bullish divergences - which suggests a larger rally
is closer than we think. The likely outcome of all this is a short
sharp shock driven by an exhaustion run in oil prices, followed
by an equally sharp rally driven by value buyers in the run up to
There was only one positive
exception to the selling rout on my stock list. IVAN
rallied 25% on huge volume as it announced an 82%
increase in oil production. But the real market stories were
the reversals, and there were many casualties; ATPG,
metal stocks as a group showed continued weakness as breakdowns
from bearish patterns intensified.
Not surpisingly, there was one
more breakout failure. PLLL
which featured twice on June
21st and July 20th clipped
the higher of its stops today.
Aug 4th: The
swift reversal in oil
prices, ending the day on a bearish engulfing pattern, sparked
a brief rally in the markets. Unfortunately, the drop in oil prices
was not the bullish catalyst needed to reverse yesterday's declines.
ended the day on a spinning top on higher volume - bulls and bears
continue to struggle and neither has the edge. The NASDAQ
100 had a close similar to yesterday's on higher volume, a potential
reversal, although a rally above 1390 is unlikely to hold without
a rise in volume. The tech indices were helped by the Sox
holding support and greater strength in the Russell
2000. The Dow
failed to close above 10,150 resistance, although 10,000 did act
as support, while the S&P
ended on a bullish doji, closing near the days highs.
Weakness in gold
has overshadowed strength in silver,
as silver stocks PAAS
broke bearish flags to the downside. Precious metal stocks continue
to base and longs should wait for the underlying metals to break
to new 3-month highs before commiting.
Some stocks attempted to break
resistance on todays rally. Breakout candidate, TDS
nipped over resistance of its consolidation pennant. SNIC
formed a bullish harami, but volume was well below yesterday's,
so it should be watched for changes in upside volume. LU
regained support on higher volume, ending on a bullish piercing
pattern, watch for a short covering rally. On the negative front,
broke support on light volume, further lows look faovred as previous
good news has had
little positive influence in the stock. SIRI
lossess acclerated, todays trading suggests lower prices tomorrow
dipped below support of its triangle, lower prices tomorrow would
complete a bearish falling-3-methods sequence. ERES
losses accelerate, look for a break of $21.85, it closed today at
is forming a bearish descending triangle - look for a similar collapse
as hit VISG. UDW
is attempting a double bottom with a small volume spike at support.
A few more breakouts hit their
stops. COGN which
featured on June 25th hit
its stop after losing support yesterday.
Aug 3rd: The
markets were showing signs of struggle late last week, but there
was a gliimer of hope yesterday that something better was in the
offing, only for bears to return with avengence today. A weak consumer
report was the cause of the current decline. Markets returned
all of yesterday's gains, and them some, in sharp declines. Volume
was light, but breakdown's do not need strong volume for confirmation.
At this point we are looking at tests of July lows, so it is best
to stand aside until markets feel out these lows. The Sox
looks the most vulnerable to further losses as its nascent rally
off support encountered trouble maintaining its run. Should this
fall outside of its channel it will spell further trouble for the
100. The Dow
left behind a bull trap, the last time it did this was near the
end of June and it is clear to see what followed. The volatility
index closed higher, negating yesterday's bearish black hammer.
Not surprisingly, stocks suffered.
broke support of a descending triangle on higher volume. This was
a prior successful breakout play, but now looks vulnerable to further
lost near term support on light volume, but look for a pickup in
the downside tomorrow. SNIC
crashed on its earnings
release, shedding 20% on huge volume. LU
edged below $3.00 support, continuing a decline started at $3.87,
further losses look likely. SIRI's
pennant breakout is running into trouble - recent price action suggests
the initial upside move was a bull trap, a move to $2.25 is favored.
confirmed a bear flag as it closed below support. OPSW
closed below support of it's July congestion, there was no news
to account for the move.
Not all was doom and gloom.
Breakout candidate, DGII
closed in the upper part of a consolidation following its break
of $11.00 resistance. Another breakout candidate, GI,
is on the verge of the next phase of its rally - it sits on closing
resistance of $25.55, although current upside volume is a little
on the shy side. OMNI
completed its short sharp shock, rally 31% on above average volume
- there was no news to account for the move
Todays selling caused a few
more breakouts to fail. IT
which featured on June 21st
hit its stop after weeks of steady declines. VRNT,
which featured on June 29th
hit its stop after an initial gap down and rally.
Aug 2nd: Markets
inched higher, holding last weeks gains in the face of a terror
warning. Market volume was mixed, higher in the NASDAQ,
but lower in the Dow,
100. The large red candlestick which marked heavier selling
two weeks ago remains dominant in all markets, with the exception
of the Dow.
Resistance from this selling sits at 1,933 for the NASDAQ,
1,433 for the NASDAQ
100, 1,108 for the S&P
and 567 in the Russell
2000. The Dow
broke over 10,150 resistance, ending the bearishness of last weeks
small rising white real bodies, but volume continued to decline
in this week long rally. The S&P
ended the day on small gains, but has a similar declining volume
pattern. The NASDAQ
gapped down at the open, held that gap as resistance over the course
of the trading day, but closed higher in late day trading. The NASDAQ
100 ended the day on a bullish piercing pattern, but held resistance
metal stocks look to have completed week long bearish flags.
Silver stocks (PAAS, SIL, and SSRI) ended on bearish dojis or bearish
hanging men after 3-4 days of gains. Watch for break of todays lows
Not all stocks had a quiet day.
crashed lower on higher volume, reversing last Friday's move to
new highs. ATPG
lept to new highs on higher volume, marking a new breakout. SBAC
looks set to pullback after early day moves to new highs reversed
to close near the lows - ending the day on a bearish inverse hammer.
moved to new highs, negating last weeks bearish engulfing pattern.
closed on a bullish engulfing pattern, building for a move to test
completed a bullish three white soldiers combination - adding strength
to a move to close its breakdown gap. NT
is in the process of closing its gap - moving into the gap and above
the highs of last weeks sell off. QCOM
rallied on higher volume, likely fueled by short covering, a break
of $73 would be very bullish for the stock. ATEA's
relief bounce looks to have completed on todays bearish cloud cover.
broke its ascending triangle to new highs on strong volume. MAGS
small rally last week met a stumbling block as it ended on bearish
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