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WHAT HAPPENED?
Let me show you the short term pattern I was seeing in the S&
P 500. You can see the bearish ABC pattern that should have resulted in another move down. This first move down (Tuesday) looked like a wave A of a larger bullish ABC pattern formation. The choppy and rising move looked like a wave B and I was expecting a sell off to complete wave C. I was then going to look to go long and trade the next move up. Well, we gapped up at the open with very high participation (advancers were much higher than decliners). I got stopped out of that short term bearish trade, but some of the other bullish patterns did very well (SMH, STEC, STX). By the way, almost all of these bullish picks still look very good. Some of them have pulled back a bit and created great buying opportunities. We are at the critical 930 resistance area. This could be a head and shoulders pattern which would probably lead to another big sell off. However...if we can break above this 930 resistance, we should be able to run up to the next resistance area around 950. This is why those bullish patter
ns I posted a few days ago could work out very well. I think we could break this resistance...mostly because everyone out there is calling this a head and shoulders pattern...and you know how much I like to go against the "crowd". Also, look back at that 15 minute chart. You can see a possible bullish pattern formation (choppy and falling) taking place today. With the markets closed on Friday (4th of July holiday), trading should be very light tomorrow. I really wouldn't trust any break out (or sell off) on light volume...and going into a holiday weekend. By the way, I will be going out of town until next Thursday, July 9th. I need some more success stories to post on the blog. Please take some time and send those in. I'll try to post something tomorrow before I leave, but if not...have a great weekend and I'll see you next week.
P 500. You can see the bearish ABC pattern that should have resulted in another move down. This first move down (Tuesday) looked like a wave A of a larger bullish ABC pattern formation. The choppy and rising move looked like a wave B and I was expecting a sell off to complete wave C. I was then going to look to go long and trade the next move up. Well, we gapped up at the open with very high participation (advancers were much higher than decliners). I got stopped out of that short term bearish trade, but some of the other bullish patterns did very well (SMH, STEC, STX). By the way, almost all of these bullish picks still look very good. Some of them have pulled back a bit and created great buying opportunities. We are at the critical 930 resistance area. This could be a head and shoulders pattern which would probably lead to another big sell off. However...if we can break above this 930 resistance, we should be able to run up to the next resistance area around 950. This is why those bullish patter
ns I posted a few days ago could work out very well. I think we could break this resistance...mostly because everyone out there is calling this a head and shoulders pattern...and you know how much I like to go against the "crowd". Also, look back at that 15 minute chart. You can see a possible bullish pattern formation (choppy and falling) taking place today. With the markets closed on Friday (4th of July holiday), trading should be very light tomorrow. I really wouldn't trust any break out (or sell off) on light volume...and going into a holiday weekend. By the way, I will be going out of town until next Thursday, July 9th. I need some more success stories to post on the blog. Please take some time and send those in. I'll try to post something tomorrow before I leave, but if not...have a great weekend and I'll see you next week.
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