A quick update is in order as I have been absent from the blog as I had a quick vacation to New York - looks like good trading markets though.
We had the whipsaw effect with the bottom trendline in the SPY, which gave us good retracements. Ultimately, the trendline failed and the bulls took over, but are the buyers lurking as they have been? Or are "chinks in the armor" starting to show up. Go ahead and look at trendlines connecting the bottoms as this one does on the SPY. Are the support lines becoming resistance? Again, you can see the headfake in the SPY, but in many inividual stocks, the trendline is acting as resistance, providing a nice bearish opportunity with low risk, high reward and best of all, chart based reasons.
Another point supporting the "chink in the armor theory" is that commodiites have sold off so hard, you may be able to use fibonacci retracements as a bearish entry as the commodities will "fail" in their bullish sequuence, giving us a lower high for the first time. Are lower lows next?
Moving into forex, as I stated above, all of the whipsaw action in the equities has given us great retracements and DOUBLE FALL LINE TRADES. And add in some volalitility and the Average Trading Ranges pick up giving us BUFFALO BOUNCES. The GBP/USD chart shows DOUBLE FALL LINES and BUFFALO BOUNCES on Friday and a BUFFALO BOUNCE today:
The AUD/USD shows a BUFFALO BOUNCE today:
You know that I am looking forward to next week's unemployment report, but will the fun be taken out of it if we continue to sell off? Is a larger percentage moving to cash/defense these days?
Local Tip: Free Wednesday Webinar on Average Trading Ranges on Wednesday at 9pm.
Happy Trading and Be Environmentally Cool
Coach Brian
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