Category Archives: Patterns

1920 SPX Rally Target In Sight

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Last Wednesday night, after some seriously wild action had settled down a bit after hours, I made some educated guesses in my trading room about what ES/SPX might do over the next few days. Some of these I also talked about on twitter then and the next morning, and reviewed the status of all of these on Friday morning. They were as follows from ES 1842-3 at the time:

1. ES was making the second low of a double bottom targeting the 1855 area (topped at 1857)
2. That move should make the second high of a double top (target 1821 area) (bottomed 1815)
3. An (Thursday) AM low would be made on SPX in the 1830-40 ES area (low was 1828)
4. SPX would then break up from an IHS with a target in the 1920 area (to be hit today?)
5. That 1920 area would be reached on Thurs/Fri this (now last) week (rally too slow)
6. SPX would reverse back down hard to hit the 1789 double top target (pending)
7. That double-top target would be hit Tues – Thurs next (now this) week (ambitious)

Janet Yellen wasn’t as much help as I had hoped on Friday morning and while it seems very likely that my 1920 SPX will be hit in trading hours today, this is obvious a solid two days later than I had expected. Does that make the outlook here more bullish? Possibly yes. I’m looking for a test of my 1920 SPX target in trading hours this morning and then I would like to see a very hard rejection from that high. We’ll see whether I get that. (more…)

The Key to Success

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The stock below, KeyCorp, is a good short candidate in its own right, but it’s also representative of the kind of short I’m seeking these days. It has these elements:

+ a clean topping pattern;
+ a firm drop, exhibiting that it’s vulnerable to the general weakness we saw in past weeks;
+ a hearty bounce, pushing it to a more attractive risk/reward level.

As with so many other stocks, this one has a horizontal line anchored on a gap (in this instance, at a dollar value of $12.71) (more…)

The Shadow of 1987

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On Wednesday night, after some seriously wild action had settled down a bit after hours, I made some educated guesses in my trading room about what ES/SPX might do over the next few days. Some of these I also talked about on twitter then and yesterday morning. They were as follows from ES 1842-3 at the time:

1. ES was making the second low of a double bottom targeting the 1855 area (Topped at 1857)
2. That move should make the second high of a double top (target 1821 area) (bottomed 1815)
3. An (Thursday) AM low would be made on SPX in the 1830-40 ES area (low was 1828)
4. SPX would then break up from an IHS with a target in the 1920 area (pending)
5. That 1920 area would be reached on Thurs/Fri this week (pending)
6. SPX would reverse back down hard to hit the 1789 double top target (pending)
6. That double-top target would be hit Tues – Thurs next week (pending) (more…)

A Head and…………Shoulder???

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I just wanted to throw out one ridiculous suggestion, since I remain stunned at how feeble these countertrend rallies are: what if the topping pattern is complete, and we have a left shoulder, a head……….and that’s it? In other words, what if the neckline is already reliably in place, and this pattern is a horrific genetic anomaly, causing women to turn their heads, children to shriek in horror, and men to take pictures and post them to Facebook? Consider it.

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