BIG DIVERGENCES

Look at the RSI and MACD divergences taking place in the market. As the market goes higher, the RSI and MACD keep trending lower. These divergences don't always mean that the market will go down, but they are signals that shouldn't be ignored. I hope everyone who made the gold trade took some money off the table. It could still continue to trend up, but I didn't like the sharpness of the sell off over the last two days. Great traders always take some money off the table...even if they feel the trend will continue. Here's another symmetrical triangle pattern I like...SOHU. Wait for the breakout. You could use the 50 day moving average as a stop. If you were late to the gold trade, be patient. Wait to see if the gold stocks (more specifically the GDX) can get back above today's high in the next few days. If it can, you might conclude that the buyers have come back and the trend could continue. I love some of the patterns on the energy stocks...particularly natural gas (CHK, APA, and APC). I'm a little late in recommending some of these energy stocks. It might be because I am very suspicious of this latest trend. If you do trade any of these patterns, please do so with small amounts of your cash. Use sound money management principles. Keep an eye on the VIX tomorrow. It is near a support area around 24. We've had a couple of sell offs in the last few weeks when the VIX has hit this area.