Toni Hansen's Online Trading Blog

Out Sick =(

Toni Hansen — Wed, 07 May 2008 02:11:00 +0000

Hey gang... Well, I came down sick for the first time in 18 months where it was more than just a little cold... ugh! I will be sending out some patterns classes via email to my mailing list instead of the daily market letter this week, so watch out for them. You can sign up at http://www.tonihansen.com if you are not already on the list. I hope to be back on Monday, but I slept for 19 hours straight yesterday into today and am now going back to bed! Take care everyone!

Chatroom Trade and Commentary Notes - 20080505

Toni Hansen — Mon, 05 May 2008 14:40:00 +0000

8:37 ET yhoo might be good for a bounce (out of the open... was referencing earlier question on how to trade the news) actually given the extent of the gap on that particular stock (opened at $23.05)
10:15 yhoo doing decent job of bouncing has first resistance hitting at the 24 zone

9:35 dow leading market on the downside

9:37 FCX on upside watch list today (10:14 $114.65 "D" trigger, 11:04 $115.05 "A" pattern trigger)
11:33 fcx coming into first restiance ($115.75)

9:53 ANR on upside breakout watch list (10:42 $54.65 "D" style trigger, 11:05 $54.80 "A" style trigger, or 11:20 $55 "C" style trigger)
11:28 just took a bit off ANR... resistance from morning high ($55.50-$55.65 resistance zone)

9:54 yeah (i) like that clr also (for upside breakout)... (10:13 trigger $48.77 or 10:30 over $49.50)
10:38 clr first resistance zone here for those following it ($51.35)

9:56 futs at a bit of resistance here

9:56 HES maybe but momo needs to change intraday... would be upside breakout that is (momo changed and triggered an "A" pattern at 10:10 over $109.15)
10:29 HES back at upper end of the range
10:36 HES "a" pattern from earlier hitting initial resistance ($110.00)

10:03 lot of the things that are in high level bases showing weakness in the bases

10:26 saw tdw too late (educational example) :( was trading 58.90 and didnt want to chase... really nice daily on it
member: you like the tdw daily toni? for trapped longs having to sell?
me: yep ISRG had similar action onthe 18th same concept... that daily pattern usually closes near day's lows but can put in most of th emove in the morning and then just chop in the afternoon... FSLR thursday was also similar daily type of trap

10:35 (discussing MEE in the room) "i had MEE btw as momo short scalp into 10:00 on 50 tick chart for those studying that pattern" (educational example... did not have time to call it due to the time frame... trade was over by 10:15 ET)

10:55 WFR base at lows intraday volume and pace in the range are cons

10:59 NQ at premarket lows

11:04 ES 50% retracement zone back to may 1 lows
11:40 futs coming off first resistance from that 15 min support around 11 we were watching... its the 5 min 20 sma

12:01 i am not sure what to make of the market for this afternoon.... futs are trying a 5 min phoenix but on the risky side

12:02 sedona : indices daily chart is toppy ... maybe not going anywhere today
12:03 Toni : yeah i dont have a lot of confidence in follow through today so far... just not seeing it... things getting stuck at first support and resistance levels only... daily is actually on the weak side in the indices for today

12:04 Kaizen: could 5m ES be forming avalanche pattern to upside?
12:05 Toni: yeah.. that would be a phoenix... risk is higher than averge for that setup right now though because it has a rapidly ascending triangle on the 5 min
12:05 Toni: 12:05:26 Phoenix: For more information on this setup, please see http://www.tradingfrommainstreet.com/techanalysis2.html#17
12:05 Toni: avalanche is the pattern off highs
12:05 Toni: phoenix is the pattern off lows
12:05 Toni: just flipped over
12:05 Kaizen: ok, thx
12:27 Toni: can see on that phoenix that it technically broke the upper channel line but essentially formed a trap
12:27 Toni: any time you have a very tight rising triangle after it comes off lows the odds increase it will trap buyers
12:27 Toni: so i like to see two lows in a phoenix or base
12:28 Toni: reduces that risk substantially
12:38 Toni: the NQ actually has two lows in now on the 2 min along this 5 min 20 sma

Discussion on ANR Buy Setup
13:00 Toni: i am counting on ANR to make my day ... i fed it part of my veggie burger to help keep it happy
13:00 Toni: it seems to like veggie burgers
13:01 crack: where will u puke ur veggie burger?
13:02 Toni: i was late...55.20 then added back at 55 just before the lastpop
13:02 crack: wheres ur stop now?
13:02 Toni: crack stop talking mean to it!
13:02 Toni: under 54.6
13:03 Toni: had order in for 55.86 part but missed by a penny :/
13:05 norancho_: ANR ran out of gas on veggie burger, that doesn't happen with hamburger
13:05 Mykonos: ANR heavy sellers
13:05 Toni: crack induced vomiting in ANR :(
13:06 Toni: yeah...stocks dont usually go anywhere on hamburgers... sit on the couch with their beer waiting for the prices to come to them
13:06 Toni: :)
13:06 norancho_: you say that like it is bad
13:06 Toni: lol
13:06 norancho_: :)
13:08 Toni: i had .35 cent slippage off the high on partials for being 1 cent off drrr
13:09 Rory: what did you like about anr
13:11 Toni: the main thing that first caught my eye was the daily chart
13:11 Toni: if you look you can see it had two waves of correction
13:11 Toni: coming in between the 20 and 50 sma
13:11 Toni: you can probably see that better on a 60 min
13:12 Toni: volume was on the light side on the selling
13:12 Toni: and two wave corrections can easily form continaution patterns
13:12 Toni: it actually triggered as such on friday
13:12 Toni: but congested into the close
13:12 Toni: which was good because had it ran into the close the gap could more easily be an exhaustion gap
13:12 Toni: since this was a base into the close on friday
13:13 Toni: and a daily setup after two waves of correction
13:13 Toni: you are more likely to get a trend day off that type of gap
13:13 Toni: i look at all daily charts that look like this for intraday buying ops
13:13 Toni: and use the template:
13:13 Toni: 13:13:41 Breakout Template: For information on A, B, C, D, or Z template patterns, please see http://tradingfrommainstreet.com/images/roomexamples/BREAKOUT_TEMPLATE.gif The green circle is the entry with the red bar as the stop.
13:13 Toni: for timing them
13:13 Toni: will look for two wave corrections intraday
13:13 Toni: or other forms of base breakout
13:14 Toni: ANR had a couple potential entry triggers which i posted in the blog
13:14 Toni: i caught the last one
13:14 Toni: then the continuation
13:14 Rory: i see what your talking about on light volume sell off
13:14 Toni: which was actually a two-wave buy on the 15 min
13:14 Toni: the light vlume since 11:30 was the reason to add on in the $55 zone
13:15 Toni: i was looking at 56 as initial target zone but when something starts at a whole number it often will stall at .86-.92
13:15 Toni: so i just used the lower end of that since it has been a bit wider in a spread
13:16 Toni: when it hit .85 and began to turn though i had to change my order fast because i knew it would at least pullback to the 5 min 20 sma and since i'd added to the position i wanted to protect that addition at the first main resistance
13:16 Toni: but was slow
13:16 Toni: well.. it went fast
13:17 Toni: usually wont drop like a rock like it did this time
13:17 Toni: i am actually gonna go ahead ans scratch
13:18 crack: done any stat work on size/% gap leading to trend day on these type of plays?
13:18 Toni: this momo change is not positve and the market is having trouble holding up
13:18 Toni: it has a 15 min 2 wave cont short it is trying
13:19 Toni: the last work i did was last summer.. with the base into the close and that two wave pullback it was about 90% on at least having a trend morning or else closing near day's highs
13:19 Toni: it has a higher failure rate when the overall market is very extended
13:20 Toni: but in an iffy market the odds are still that high
13:20 Toni: so like int he middle of a trend move on a daily int he overall market
13:20 Toni: will still give strong follow through on that type of daily in an individual stock
13:20 Toni: got .92 btw
13:21 crack: will u flip and ssh it under any conditions?
13:21 Toni: this might still try again but my odds dropped a lot
13:21 Toni: the ones i will short are
13:21 Toni: say you have that pullback ont he daily or 60 min
13:21 Toni: then it turns
13:22 Toni: runs off lows
13:22 Toni: then continues the next day
13:22 Toni: thent he third day it gaps up
13:22 crack: pbr clears daily swing hi's
13:22 Toni: will look to play that either as scalp up fast in first 60 min
13:22 Toni: or reverse
13:22 Toni: for short
13:22 Toni: because it tends to not follow through more than 60 min
13:23 Toni: often not more than 15
13:23 Toni: this particular one i wouldnt short because the daily is too strong and doesnt show trend exhaustion yet intraday
13:24 crack: if you only had one pattern to trade which one would it be?
13:24 charlie1: the one that wins
13:24 Toni: momo reversals
13:24 crack: recent example?
13:24 crack: tdw?
13:24 Toni: BIDU just had one into 13:00
13:25 Toni: short
13:25 crack: what is the time frame and trigger?
13:25 Toni: can see it on a 1 min
13:25 Toni: or 50 tick
13:26 crack: u ssh that little 1mn pullback to 377 zone?
13:26 Toni: i draw a channel line under lows into that last high that made a slightly higher high and short the channel break
13:26 Toni: then place stop over the highs
13:26 crack: can u post a pick on ur blog?
13:26 Toni: if it stops out coming off a third time then i take 1.5 risk on it off a fourth high
13:27 Toni: like bidu you might havetaken just before 12:45 off the third high
13:27 Toni: at 377 area
13:27 Toni: and may have gotten flushed out
13:27 Toni: so then i take 1 and a half risk units instead of regular one
13:27 Toni: coming off fourth highs
13:28 Toni: often there is slightly more time difference between third and fourth high
13:28 Toni: than betweent he first and second and second and third
13:28 Toni: which will be more comparable
13:28 Toni: that 15 min 2 wave cont short in the indices is under way btw
13:50 Toni: hope you enjoyed the day... for those with this two wave futs short it has next support at morning lows on es and friday lows on nq

BIDU Momo Reversal Short

Toni's Position Trader Newsletter Pick of the Week

Toni Hansen — Mon, 05 May 2008 08:51:00 +0000

The Goodyear Tire & Rubber Company (GT) engages in the development, manufacture, distribution, and sale of tires and related products and services worldwide.

Sector: Consumer Goods
Industry: Rubber and Plastics

GT was one of the market's darlings in late 2006 and into mid-2007. Since then it has been in a corrective mode. It has formed two waves of selling on a monthly time frame into the 20 month simple moving average and has begun to stabilize at that level. I am expecting the upside momentum in GT to increase at this point and will begin to build a position in it with the 20 months sma as support. Notice that volume has recently increased after a period of diminished volume. It has done so with an upside bias, suggesting that the security will continue in that direction. A setup such as the two-wave correction can often begin gradually like GT has done so far and increase on the upside much like a slope of a mountain, so the fact that it did not rapidly bounce off the monthly support and has rounded off at it instead is not a large concern for me.

Stock to Watch:
Long: AZO - Note that AZO is related to GT in that it is also in automotives, although it is technically in the services sector and auto parts industry.

Goodyear Tire & Rubber Co. (GT)

swingtrade watch list for monday, may 5

Toni Hansen — Mon, 05 May 2008 07:27:00 +0000

I am watching UHAL, KFT and UTHR for buy setups as swingtrades based on daily breakout formations. KFT I would prefer a slight correction on the 60 min. UHAL can go quite easily on Monday. UTHR would need a cont. also since it triggered a bit early on Friday and is now more extended on the 60 min. although it has room into $98-100 as a swing. UHAL target is $68-$70. KFT target is $34.

Daily Channel Breakout Falters

Toni Hansen — Sun, 04 May 2008 03:19:00 +0000

Good day! The index futures surged higher into the open on Friday following better-than-expected jobs data. Nonfarm payrolls in April fell by 20,000, substantially fewer than the average of 80k/month average year to date. Economists had been anticipating a job loss of 78,000. April's jobless rate dropped to 5%, off 5.1% in March, while it had been expected to inch higher to 5.2%. Average hourly earnings increased by 1 cent to a year-over-year gain of 3.4%, while the average workweek fell six minutes to 33.7 hours. The factory workweek fell 18 minutes to 40.9 hours.

The premarket rally created an opening price level in the indices which broke through the upper channel of the daily trend we have been following over the past two weeks. It is common that an upside gap out of a trend channel will create continuation of that channel break. In individual stocks I actually look for such a move to help me identify stocks that will have a higher probability of a trend day in the direction of the gap. When the overall market experiences a gap of this size, however, especially after a trend day such as the one which took place on Thursday, such a gap has a much more difficult time holding and the bias favors a closure of the gap.

The market opened on Friday at fairly decent price resistance, particularly in the S&P 500 ($SPX) and Dow Jones Industrial Average ($DJI). I often use the index futures to identify support and resistance levels. The EMini futures provide very accurate readings. Last November the June contract for the EMini S&P 500 (ES) hit a low of 1426.25. The premarket high on the ES was 1427, with an opening high of 1424. This landed it squarely in the zone of the support turned resistance from November. The mini-sized Dow (YM) experienced similar resistance from a weekly low made in August of 2007 at 13199. The premarket high on the YM was 13133. While this is not as close as it was on the ES, it was still in the zone of that resistance given the size of the time frame involved, although this also means there is more wiggle room on both sides of that resistance level.

This weekly resistance in the indices, combined with the bearish bias on this type of gap in the indices, helped the market start to sell off even before the opening bell rang. An Avalanche had been forming on the 5 minute charts in the premarket and triggered at the same time as the intraday session began, sending prices plummeting out of the open.

Dow Jones Industrial Average ($DJI)

The market found initial support at the 9:45 ET correction period. At this time the Nasdaq Composite ($COMPX) had also fallen into the support zone from Thursday's highs. The two worked together and the market bounced into 10:00 ET. The momentum of the rally was strong, but not as strong as the descent had been and the congestion from the premarket base into the open served as strong resistance, allowing the market to once again begin to sell off as the morning progressed. The light volume on the bounce helped, since it signified a lack of truly committed bulls. Whenever the market rallies on light volume it is a warning sign and increases the risk that it can quickly reverse.

At 10:00 ET the Commerce Department came out with its most recent statistics on U.S. factory orders. Excluding products related to transportation, orders for U.S. goods rose by 2.2% in March. This is the largest increase in a year. Durable goods orders increased 0.1%, coming in higher than anticipated. This data, combined with the earlier jobs data and recent decisions from the Fed, are fueling speculation that the economy may be beginning to stabilize. It didn't do much to help the market out intraday, however, since prices began to fall once again soon after the 10:00 ET data.

The market stalled briefly at morning lows and the 5 minute 20 period simple moving average, but instead of forming a continuation pattern such as an Avalanche, a three-bar continuation formed on the 5 minute time frame. The move was decent out of this pattern, taking the Nasdaq Composite back to its 15 minute 20 sma, but the overall momentum was not as strong as earlier. This is rather common with this type of continuation pattern and can lead to choppier market action.

S&P 500 ($SPX)

The indices had begun to break lower again quickly, but that momentum lasted for only a couple of minutes out of 10:30 ET and it slowed as the indices made lows into the 11:00 ET correction period. The slower momentum allowed the indices to pop quickly, albeit briefly, out of 11:00 into the 5 minute 20 sma resistance, which hit at the 11:15 ET correction period. This resistance held and a 5 minute 2-wave continuation pattern was created, triggering into the 12:00 ET correction period.

The 15 minute time frame made it difficult for the market to gain momentum on the downside on Friday despite the larger bias in that direction. Overall the upside from Thursday into Friday was simply too strong. Sharp upside moves will most often correct through a more gradual pullback. Downside momentum has a difficult time increasing unless the market forms a more gradual upside following the initial correction off highs. On Friday, however, the midday congestion simply did not form long enough to create a larger short setup. Instead it kept breaking down on the 5 minute time frame, making a series of lower lows on the 5 and 15 minute time frame which was a steady trend, but with a slower trend channel than the prior upside move.

At 13:00 ET the market flushed quickly lower. This took the indices into the middle of the congestion level from Thursday. The middle of a previous congestion zone is very strong support and it held well. The market began to increase in upside momentum, hitting prior 5 minute highs and breaking the 5 minute 20 sma just prior to 14:00 ET. It then flushed lower at 14:00 ET, but this simply created a better test of the support and it fell into congestion along those lows. Since the momentum on the downside was slower than the upside and there were slightly lower lows in the S&Ps and Dow on the 5 minute time frame with strong 15 minute support, it made it more likely that the lows would hold for the remainder of the day.

The pattern along the lows from 13:00 to 15:00 ET is actually one, which, had the momentum lower into 13:00 been more substantial, would typically be a short setup. Given the pace and trend placement, however, the risk was high that a short trigger into 15:00 ET would fail. I had been asked about this very pattern intraday and in fact, the setup did trigger a false short with a slight break of the trend channel from 14:05 into 15:00 ET, but the 5 minute chart shows how the indices failed to follow though and flushed quickly higher instead. The market remained choppy into the close, but the bias had turned and the indices closed at afternoon highs, albeit still far from morning highs.

Nasdaq Composite ($COMPX)

By the closing bell the Dow was up 48.20 points, or 0.4%. It ended the session at 13,058.20, up 1.3% on the week. The S&P 500 gained 4.56 points on Friday, or 0.2%. It closed at 1,413.9, rising 1.1% on the week as a whole. Energy and financials stood out as the top market leaders in the S&P, while healthcare remained negative. The Nasdaq Composite closed lower by 3.72 points on Friday, ending down 0.1% at 2,476.99. On the week, however, it gained 2.2%, topping both the S&Ps and Dow.

The failed breakout from the daily channel is going to help the market continue to try to hold the larger channel as the new week begins. There will be room for the indices to move higher on Monday morning, continuing the reversal off Friday's lows. By afternoon, however, the way will have been paved to allow for another breakdown on the 60 minute charts with the strong potential for an Avalanche on that time frame. The larger bias is more difficult to discern since there will be room following another 60 minute correction for the market to again push higher. A lot will depend upon the momentum moves of the next several swings on that 60 minute time frame, although I do think the market will attempt a stronger test of the year's highs this coming week.

Toni's May Bookstore Specials - Over 500 Titles Discounted

Toni Hansen — Sun, 04 May 2008 03:17:00 +0000

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Thanks again for your continued support!

All my best,
Toni Hansen

Economic Reports and Earnings Events This Week:

Toni Hansen — Sun, 04 May 2008 03:15:00 +0000

Economic Reports and Events This Week:

Monday, May 5, 2008
10:00a.m. Apr ISM Non-Manufacturing Composite Index. Previous: 49.6.

Tuesday, May 6, 2008
7:45a.m. ICSC Chain Store Sales Index.
8:55a.m. Redbook Retail Sales Index.
5:00p.m. ABC/Wash Post Consumer Conf.

Wednesday, May 7, 2008
8:30a.m. 1Q Productivity, Prelim. Previous: +1.9%.
8:30a.m. 1Q Unit Labor Costs, Prelim. Previous: +2.6%.
10:00a.m. Mar Pending Home Sales Index. Previous: -1.9%.
3:00p.m. Mar Consumer Credit. Previous: +$5.28B.

Thursday, May 8, 2008
8:30a.m. Initial Jobless Claims.
10:00a.m. Mar Wholesale Trade. Previous: +1.1%.
10:00a.m. DJ-BTMU Business Barometer.

Friday, May 9, 2008
8:30a.m. Mar Trade Balance. Previous: $62.3B.

Key Earnings Announcements This Week:

Monday, May 5, 2008
Before: AMRI, ANR, ALO, ALVR, BKI, CZN, CMS, CORS (?), ENG, GG, GAP (?), HAIN, HEW, INXI, MVL, MCY, NTE, NSTC, NGPC, NAT, NOVN (?), ORBK, PPC, PMI (?), POR, RRST, STEC, TDW, WLL
After: JOBS (?), ARG, ALJ, AIMC, APC, AGII, ALC, BAS, CECO, CLF, CSA, DIVX, DLLR, DSCM, ERES, FST, GERN, HLF, HHGP, IBI, INTX (?), KND, LVS, LF, LOOK, MCK, MERC, NLS, EGOV, OMPI, PKY, POM, FACE, PBI (?), PPS, PWAV, PFG, PSB, RADN (?), RAE, RAS, RTEC, SMG, SPRT, SYKE, SYMM, TS, TX, TNS, UDR, VMC, VYYO (?), WTW

Tuesday, May 6, 2008
Before: ADES, APAC, WTR, ARJ, ATRC, ABX, BBG (?), CSE, CPHL, FUN, LNG (?), CHD (?), XEC, CXW, COV, COWN (?), DK, UFS, RRD, DHI, ECLP, EMS, EMR, EL, FNM, FTE, FTEK, WOLF, HSIC, HDIX, HURN, HYGS, ITWO, IAR, IPGP, LAZ, LMIA, LPX, MMP, MLM, PCS, MGM, MDH, TAP, MYGN, NSSC, NURO, NYX, PTRY, PKE (?), PKD, PEI, PFGC, PRGO, PQ, PCG, PLA, PCP, PEG, Q, SLE, SIRI (?), SKH, SE, SPC, JOE, STXS, TKLC, PHC, TEVA, TWPG, TDG, TWP, UNT, VTAL (?), VNO, WTI, WWE, XRIT (?)
After: ACAS, ACLI, ASYT, ATHN, BIDZ, BIO, NILE, BDE (?), BEXP, CELL, CRL, CHRD, CHDN, CSCO, CNL, CRK (?), CPTS, OFC, CUTR, TRAK, DM, EGLE, EXP, ESE, XCO, EXEL, EXLS, GSX, HCKT, HAR, HLEX, HLS, HLTH, HOKU, SOLD, HYC, IIG, IO, JCOM, JKHY, KCP, MFB, MCHX, ME, MXWL, MFLX, ORCC, OPTV, OPMR, OSUR, ORA, OSIP, PACR, PEC, POL, PRXI, QSII (?), RFMD, RUTH, SLXP, SRX, STAA, STAN, SGY, SNCR, SVR, TTGT, THQI, TLCV, UPL, UAM, UTI, VCLK, VTR, DIS, WRNC (?), WBMD, WFMI, GB, WMS, ZGEN

Wednesday, May 7, 2008
Before: AGN, ALD, AHCI, ALY, AOB, AHII (?), ARD (?), CRZO (?), CKP, CSK, CLHB, CTSH, CTB, CXR, DWSN, DVN, DTV, DTG (?), EMKR (?),, EBS, ENB, XJT (?),, FWLT, FTO, FCN, GTN, HELE, HSP, HWCC (?), NRGY, IDCC, IHR, JRCC (?), KNDL, KBALB, ID, LAMR, LM (?), MKTX, MMC, MMS (?), MDTH, MCCC, MGAM, NCR, NEWS, NTMD, ONNN, OHB (?),, OSCI, OC, PCAP (?), PRFT, PNK, PXD, PLUG (?), QLTY (?), PWR, KWK, SBGI, SKYW, SEP, TRK, STE, BRLC (?), TTES, TOT, RIG, TRS (?), UNCA, VRX, WRES
During: ACMR (?), JRT (?),
After: AMCN, AIRN, AEL, ARII, AHS, ANDE, ARNA, ACLS, BKUNA (?), BLKB, BBBB, CENT, CCRT, COGO, CPII, CROX (?), CCRN, DNB, DRRX, BAGL, EAC, ENCY (?), ENOC, EXPD (?), FRT, FCH, FOE, FNET, GHDX, ROCK (?), GIL, GCOM, GOLF, GXP, HANS, HCN, HIL, IDSY, TEG, IPAR, INAP, KNTA, LTRE (?), MVSN, MNR, MSTR (?), MR, MIVA (?), MSCS, NABI, NFS, NMHC (?), NSR, NWS.A, NHWK, NVEC, ODSY, OEH, PLLL (?), PDLI (?), PVA, PVR, PSPT, PCR, PL, PSSI, RAH (?), RSCR, SAFT (?), SNTS, SVNT, SCI (?), SMSI, BID (?), BEE, TLEO (?), OVEN, UEIC, VRAZ, VOLC, WRI, WEDC (?), ZIPR

Thursday, May 8, 2008Before: SMLC (?), KDE (?), ABH, ACW, ACM, ATK, AMSC, ABV (?), ASCA, AHR (?), ARCC, STST, ARQL (?), ATPG (?), ABTL, BKRS (?), BRL, BNT, BCRX (?), BVF, BORL (?), BRKR (?), CVC, CALP, CAPA (?), CELG, CTIC, CDL, CNSL, CTCT, XTEX, XTXI, CRYP (?), CUB (?), CMLS (?), CYPB (?), DWSN, DPTI, DSCO (?), DRQ (?), DYN, EIX, EP, ENER (?), EPL, FRP (?), FVRL (?), FVE (?), FRPT (?), FIG, IT, GLBC (?), GLBL, GPX (?), HEES, IDA (?), ISPH, IART (?), ISIS (?), JAH, JRC (?), KALU, KG, KOP, LXP, LCUT, TVL, LINC, LINE, LIOX (?), LAC, MIC, MPW, MEMY (?), TMR (?), MESA (?), MGPI, MEND, MLNM (?), MINI, MNTA (?), NDAQ, NGS (?), NRP, NRF, OMG, OCR, ORCH, VITA, PTIE (?), PRX (?), PDX, HK (?), PNCL, PXP, POZN, PGN, RHD, RDN (?), RCNI, RSTO (?), SBH, SGK (?), SIRO, SBSA, SPH, SUP (?), SWSI, SURW, SFY, SXCI (?), TICC (?), TTEC (?), TSO, PNX, TRGL (?), TM (?), THS, TRMP, RMIX, USPH, URBN (?), VICL (?), VG, WMG, WW, WNR (?), WATG (?), WPL (?), XMSR (?)
During: SAM (?), DNDN (?), DIOD, EPEX (?), GCA, QSFT, WCI (?)
After: APKT, ATVI, ADPT, ABCO, AEM, AIRM (?), ARE, ALNY (?), AIG, ARP, ANSV (?), ARTE (?), AGO, ATW, BE, BLTI (?), BRNC (?), BRKS, BUCA (?), BLG (?), CAMP, CPKI, CPE (?), CNQ, CTLM (?), CNTY (?), COSI (?), DAR (?), DWRI, DXCM, DEIX (?), HILL, ESIO, EMAG (?), EXAR (?), FMD, GMST (?), GDP (?), SRVY, GUID, HLYS, ICFI, IFON, INWK, NSIT, IOM (?), IPAS, DMX (?), JMP, JUPM, LEAP, LLNW, LOCM, LMNX, MSSR (?), MCGC (?), MEDX (?), MRX (?), MED (?), MELI (?), MRGE (?), MIDD (?), MOVE, NABI, NHP, UEPS, NLST (?), NGAS (?), NUAN (?), NUCO, NUVO, NVDA, OCNW, PEIX (?), PZZA (?), POM, PMC, PEC, POWR, PCLN, PROS (?), PSA, RNWK, RUBO (?), WINS, SALM, SD, SAPE, SGMS, SGTL (?), SIX, SONS, SRSL, SNS (?), SHO, SUPX (?), TEAM, KNOT, THRM, TMA (?), TIE (?), TRMS (?), TRLG, GROW (?), URS, YSI, VSE (?), CHIP (?), VRSN, VITL, WON (?), INT, WPTE (?), XOMA (?), ZOLT (?)

Friday, May 9, 2008
Before: AER, AYR, BECN, LSE, CCU, CCO, CCOI, GTN, HUN, OMRI, OPTR (?), RTK, SUG, STRL, WCRX, WR, WIN
During: ASYNM (?)
After: CYCC

Note: All economic numbers and earnings reports are in line with those compiled by Briefing.com. Occasionally changes will occur that are made after the posting of this column and some companies have not confirmed their time, so always double check when taking positions overnight during earnings season! (?) = Not yet confirmed at the time the list was compiled.

Tick Charts

Toni Hansen — Sat, 03 May 2008 00:35:00 +0000

segment from an email to me:

I love the patterns you watch in combination with all the additional insight and nuances you suggest as well, but the highly discretionary and dynamic nature of it all makes it easy to be careless or lack discipline in the execution. I've recently started watching the 1-min chart to see if I can take price-pattern entries there in anticipation of a pattern play-out on the 5- or 15-min charts.

segment from my response addressing this issue:

I highly suggest adding tick charts. This will show you those back and forth movements to allow you to better read the pace of a move and help time your entries and exits more precisely. Use the time frame charts like the 5 minute and 15 minute to help with bias and pattern formation, but drop down to a 100 or 50 tick chart to help time the actual trade. Pace in particular can be much more easily discerned within a pattern such as a base or whatnot on a tick chart as opposed to a time frame chart. The only disadvantage of a tick chart is that you can't use volume on it, otherwise it's vastly superior. I often use a 400 tick chart to help locate a setup and then the smaller ones to time entry, checking on volume on a time frame chart.

Trade Wrapup - 20080502

Toni Hansen — Fri, 02 May 2008 18:38:00 +0000

11:39 ITG base at lows intraday with daily channel breakdown
13:05 norancho - as ITG drags this out, does it change your interest in it?
13:07 Toni - it the momentum starts to hug the upper end of the channel,,, want it to hold under the 15 min 20 sma zone also and continue to have weaker upside in the channel than on the downside

13:17 NQ support 15 min
13:30 first resistance here on move off support

14:37 RIMM "D" buy on 5 min http://tradingfrommainstreet.com/images/roomexamples/BREAKOUT_TEMPLATE.gif

14:50 charlie might get his rally if this momo shift holds. need a slower downside move

15:05 Eternum - Toni, does YM on 5 min look like bearish D?
15:07 Toni - yeah but the slightly lower lows in the ES and the hugging at the 5 min 20 sma makes me worry it will be a trap.. had too slow of downside pace before the "D" pattern formed... slowed into that support... so risk is higher for failure or just like a double bottom or 2B at best in most cases, but often can trigger then flip fast when this setups up at this point in such a pattern so that is too much of a risk for me
15:11 Toni - see.. triggered then flipped lol

Dow Closes Above 13,000

Toni Hansen — Fri, 02 May 2008 03:41:00 +0000

Good day! The market took me a bit by surprise on Thursday, I had been anticipating another choppy day, most likely holding the lower end of Wednesday's range. The Nasdaq Composite ($COMPX), led by the tech sector, was the strongest advancer and essentially took the rest of the market along for the ride. The S&P 500 ($SPX) and Dow Jones Industrial Average ($DJI) had held the lower end of Wednesday's range with slower upside throughout the morning, but the Nasdaq buying began quickly almost immediately out of the open.

The indices opened with relatively little change off Wednesday's closing levels. Ahead of the open the Labor Department reported on the weekly jobless claims, which rose 35,000 to 380,000 for last week with continuing claims holding four-year highs. In addition, consumer prices reportedly increased by 0.3% in March, while incomes rose 0.3%. Consumer spending rose 0.4%.

Upside began within 15 minutes of the open and continued into 10:00 ET. At that point the rally in both the S&Ps and Dow stalled. More economic data came out at this time with the Commerce Department reporting a 1.1% decline in construction spending and the Institute for Supply Management index holding at 48.6% in April to indicate contraction in the manufacturing industry. New orders and production are gradually declining, but prices are continuing to rise.

The S&Ps and Dow fell into bases along the morning highs out of this data while the Nasdaq continued to step higher. The base in the S&Ps and Dow created a Phoenix formation on the 5 minute time frame with a buy setup triggering out of the 10:45 ET correction period. The momentum did not increase at all with this breakout, however, and the S&Ps and Dow fell into another range along the highs from 11:00 ET throughout the remainder of the morning. The Nasdaq also finally formed a longer correction.

By noon the Nasdaq was substantially more extended than the rest of the market. When the range along the morning highs gave way the Nasdaq had a much more difficult time gaining a foothold. Although it climbed steadily higher, the S&Ps and Dow took over the lead and surged to new highs on the day.

At 13:00 ET the S&Ps were testing Wednesday's highs and I began to look for the market to fall more into a trading range throughout the afternoon. Although this range did take hold, it took another 15 minutes and one more flush of highs before it got underway. All three of the indices were back to testing the upper channel of the daily trend channel by that time, which has been in place over the past two weeks. I have drawn the channel on each of the daily index charts to show the move from the lows and back to the highs on Thursday.

The market finally had extended itself to the point intraday that it simply had to fall back and catch its breath when that upper resistance hit at 13:15 ET. It did so over the next 45 minutes with the 5 minute 20 sma serving as support in the S&Ps and Dow. They hit at the 14:00 ET correction period and the market bounced back into the zone of the day's highs. This created a double top shorting opportunity for daytraders and continued with a two-wave pullback on the 2-5 minute charts into the 15:30 ET correction period. This completed a two-wave correction on the 15 minute charts and the market was able to rally once again into the closing bell.

Thursday's session ended with a 189.71 point gain in the Dow, or +1.5%, at 13,010.00. This was the first close over 13k since January 3rd. 25 of the Dow's 30 components posted gains. Financials were particularly strong on the day. American Express (AXP) gained 6.9%, while Bank of American (BAC) climbed 4.9%, and Citigroup (C) rose 4.2%. Tech shares also led the morning rally. Intel (INTC) climbed 4.6%, while Microsoft (MSFT) rose 3.1% on Thursday. Oil, energy, and gold turned around in the afternoon, rallying strongly while the rest of the market stalled. The S&P 500 closed higher by 23.75 points, or 1.7%, at 1,409.34. The Nasdaq gained 67.91 points, or 2.8%, and closed at 2,480.71.

Given that the momentum on a 60 minute time frame has shifted once again, The market now has the greater potential to break through the highs of the daily channel. Ideally the market will form a slower correction off one end of this channel or another before it really breaks to show more confirmation of a break to come. That does not always happen unfortunately, but it's what I tend to look for when establishing larger positions. The next daily resistance in the Dow will be at about 13220. 12617 is support. 2509 is the next Nasdaq Composite price resistance zone. 2377 is support.

Dow Jones Industrial Average ($DJI)

S&P 500 ($SPX)

Nasdaq Composite ($COMPX)

Trade Wrapup - 20080501

Toni Hansen — Thu, 01 May 2008 14:06:00 +0000

10:00 Toni futures resistance in here, premarket ES highs
. NQ 15 min 20 sma intraday. also monday highs NQ

10:05 in the ES 1387 is support, while 1938 is NQ support
momentum needs to shift again
the enxt resistance levels are 1393.5 ES and 1950 NQ
11:06 the 1393.5 level on the ES is hitting

10:31 ES has 800 tick 2T trying to form (1391.25)http://www.tradingfrommainstreet.com/techanalysis.html#2
10:42 here is first support level (1389 trading, low 1388.5)

10:55 nasdaq continuing to dominate.. its back to yesterdays highs here

12:25 market coming off some fib resistance here btw

12:49 russell 2k is closing in on the week's highs

12:56 ES hitting yesterday highs
12:40 geez.. this market non-stop

12:58 ok gang... gonna put my neck out here now but we should have seen the end of the strong upside now today... even if it continues it should just cree with chop predominate the rest of the afternoon. 13:00 ET correction period is hitting

14:30 market is doing that correction we were looking for this afternoon... can see on the 15 min how the pace has rolled over... more range.. more difficult for buyers
started 15 min later than expected.. but same idea still in play now
energy and oil and such are now taking over on the gainer side while rest back off

14:54 ES double top action 800 tick
15:37 ES double top moving on cont with avalanche... bit of support in here

15:00 MGM base at lows

Market Gives Back Gains Following Quarter-Point Fed Rate Cut

Toni Hansen — Thu, 01 May 2008 04:44:00 +0000

Good day! A typical Fed day begins with upside in the morning. On Wednesday the market held that bias quite well. After a slight gap higher, the indices formed a two-wave continuation pattern along the highs on the 5 and 15 minute time frames. They began the previous afternoon at highs on the intraday time frame and at 8:30 am ET on the all sessions time frame, so the pattern formed on several levels. I drew the 15 minute ES setup on the chart below.

The Commerce Department released the first quarter gross domestic product data ahead of the open on Wednesday. First quarter estimates came in with a 0.6% growth, larger than the 0.2% anticipated. The number was a bit deceptive, however, because 0.8% was attributed to inventory building and final sales of domestic product fell 0.2% with final domestic sales falling 0.4%. This was the first decline since the 1991 recession.

In other news, Procter & Gamble (PG) and GM (GM) both posted better-than-expected earnings. This helped set the tone for the Dow, which would end up leading the market higher throughout the morning. The early buy pattern in the indices triggered at 10:30 ET. The S&P 500 lagged ($SPX), but it also broke higher out of the 11:00 ET correction period while the Nasdaq Composite ($COMPX) and Dow Jones Industrial Average ($DJI) each formed continuation patterns at that time.

Once the Nasdaq broke, it moved steadily into new intraday highs, thus making new highs on the month as well. The Dow used its late morning strength to propel it back into Monday's highs. This served as a solid price resistance level in the indices and it hit at the same time as the 11:15 ET correction period, helping to trigger a pullback into the early afternoon.

Volume began to decline sharply following the late morning reversal. Many market participants began to take to the sidelines ahead of the afternoon Fed announcement. The mid-day correction was fairly gradual overall, first leading to a pullback into the 5 minute 20 period simple moving average, followed by an avalanche on the 5 minute time frame at 12:00 ET that created a second wave of selling into the early afternoon. Corrective moves within a larger trend often take the form of two waves, so this created a buy setup into the 13:00 ET correction period, but the market was not too enthusiastic given the looming interest rate news.

The market fell into a trading range on the 15 minute time frame with the 15 minute 20 sma as support until 14:15 ET. The Fed once again lower the interest rates, cutting it by another quarter-point to 2%. This was what the market had been expecting, although there was speculation that they would pause rate cuts for the time being. This speculation helped create a bit of a relief rally immediately following the announcement, but as soon as the news settled the bottom began to give way. The old "buy the rumor, sell the news" adage comes to mind.

The Dow had shot back into the 13,000 price resistance level immediately after the rate cut was announced, but this price level merely served as resistance. The S&Ps were also hitting Monday's highs immediately following the news and this resistance level provided another reason for the buyers to start to hold off. A bearish triangle quickly formed on the 2 minute time frame along the 5 minute 20 sma. It triggered at about 14:45 ET and as soon as the lower channel gave way the bears returned with a vengeance.

As I warned throughout the week to date, whenever the market creeps higher, such as it has done over the past two weeks and as it did on the 15 minute time frame coming off Tuesday's lows, the odds are quite high that the downside will be extreme once the channel gives way. The 15 minute channel did so with almost no hesitation, quickly plunging the indices back to Tuesday's lows and their 15 minute 200 period simple moving averages. The weaker S&Ps managed to break through these support levels a bit, but the Dow and Nasdaq held them quite well and these price levels stalled the descent at about 15:10 ET. The market did attempt to breakdown once again into the close, but the move did not have much time to follow through and did not go too much further immediately after the closing bell either.

The Dow ended the session on Wednesday at 12,820.13, down 11.81 points, or 0.1%. 16 of its 30 components posted losses on the day with Citigroup (C) (-3.99%) and Hewlett Packard (HPQ) (-3.11%) leading those losses. On the month as a whole, however, the Dow gained 4.5%. The S&P 500 ($SPX) fell 5.35 points, or 0.4%, and closed at 1,385.59. This brought its monthly gains to 4.8%. The Nasdaq Composite ($COMPX) lost 13.30 points, or 0.5%, on Wednesday and closed at 2,412.80 for a 5.9% gain in April.

Although the post-Fed drop took the indices through their 15 minute channel lows very quickly, the daily channel remains in place. The market tested the lows of that channel on the late-day decline, as shown on my charts below. It still remains very easy for the same type of action which took place intraday on the 15 minute charts to now form on the daily time frame. As a result, I am very cautious on any plays on the long side at this time and will be favoring shorts. It would not take much for the 20 day sma to break to the downside.

Dow Jones Industrial Average ($DJI)

S&P 500 ($SPX)

Nasdaq Composite ($COMPX)

Trade Wrapup - 20080430

Toni Hansen — Wed, 30 Apr 2008 14:30:00 +0000

Trade Wrapup - 20080430

10:28 YM (12873) and ES (1395) forming 5 min "D" patterns which begin at 15:00 yesterday
Breakout Template: For information on A, B, C, D, or Z template patterns, please see http://tradingfrommainstreet.com/images/roomexamples/BREAKOUT_TEMPLATE.gif The green circle is the entry with the red bar as the stop.
also at about 8:30 am this mornign all sessions charts
NQ also (1945.50)
10:33 NQ triggered... good start... YM also moving well
10:38 first resistance showing (1948.5 NQ, 1396.25 ES, 12887 YM)
10:45 futs reacting here to that first resistance levels... congestion
10:54 futs second resistance hitting (1950.5 NQ, 1396.75 ES, 12905 YM)
11:02 YM is certainly the leader on this "d" cont pattern. it is coming into price resistance from the 28th with that congestion at highs
11:05 (1950.5 NQ, 1397.25 ES, 12915 YM)

10:30 GPRO still basing (at highs from previous session)

10:30 Fed today so expect even slower action into early afternoon

11:12 RESISTANCE coming into 11:15 correction period

11:44 RAI is basing at lows.... not too fond of the slightly lower lowe in the base.. that is a con - 54.24-54.44 entries, 53.25 target
12:28 want rai to hold 5 min 20 sma resitance which iw about 54.42
12:43 RAI is testing the 5 min 20 sma... need to see it hold
14:23 was not brave enough to hold bmrn and rai through the fed but both actually holding the pattern still and rai making new lows.. could have easily re-entered... i missed it though just now
14:46 first support here on RAI' - note: "managed to get some RAI short at 54.97 at 14:37 ET.. just protected part at 53.54... looking for 53 rest... 5 min 20 sma is resistance"
15:15 53.93 RAI trailing stop

11:51 BMRN base at highs 36.50-36.60 entries, 37 initial target
14:23 was not brave enough to hold bmrn and rai through the fed but both actually holding the pattern still and rai making new lows.. could have easily re-entered... i missed it though just now
14:29 BMRN i'd go ahead and exit if not already done so ahead of the fed.. forming 5 min avalanche (36.35)

12:04 RESISTANCE YM is hitting prior highs on the 5 min here

Jacob : Toni, I hope you don't mind my asking a question. Is your "D" pattern mentioned this morning the same thing as your "2B" from your Pattern Reference Guide?
Toni : no.... the D can be found on this template:
http://tradingfrommainstreet.com/images/roomexamples/BREAKOUT_TEMPLATE.gif The green circle is the entry with the red bar as the stop.
a D setup can have a 2B in it though. if the second low is slightly lower than the first and its a reversal pattern off lows, but it is also a continuation pattern. essentially its a two-wave pullback pattern

11:55 hmm.. i may be done until after the fed... not finding much
12:18 risk is going to remain higher on anything into the fed

12:30 SUPPORT this is 15 min 20 sma on the es and nq
13:10 this is some initial resistance on the bounce off that 15 min 20 sma zone

14:14 RESISTANCE ES hitting monday highs

14:26 SUPPORT ES and NQ both pulled back to the 30 min 20 sma levels off that resistance and these are serving as support

15:15 SUPPORT: this is NQ 29th lows as support btw

Market Holds Trading Channel

Toni Hansen — Tue, 29 Apr 2008 23:05:00 +0000

Good day! As discussed in my last several columns, the market has been in a choppy trading channel on the daily time frame since the 18th. I had been expecting the market to continue to hold that channel at the beginning of this week and so far the market has obliged. On Monday the indices had tested the upper end of that channel on light volume and with slowing momentum. This allowed the indices to break lower into the close. The pattern was large enough on the 15 minute time frame that it was also able to continue into Tuesday morning, bringing the market back to the lower end of that larger channel within the first 90 minutes of trade.

Although Tuesday's session began with the weaker bias thanks to the 15 minute reversal pattern which had triggered the prior afternoon, the selling did not increase again until the Conference Board released its April consumer confidence reading. The consumer confidence index fell from an upwardly revised 65.9 in March to 62.3 in April, which is its lowest level since March 2003. It was higher than the 61.0 expected, but it was not enough to hold up the the market and a second wave of selling began immediately.

In other news on Tuesday, U.S. home prices continued to fall, down 2.6% from January according to the Case-Shiller home price index measuring 20 key cities. This means that for the past year home prices have fallen a record 12.7%. Prices are expected to continue to decline with the largest losses in Las Vegas and Miami, both of which have fallen by more than 20% in the past year.

Following the morning's economic data, the downside continued in the market until the S&P 500 ($SPX) and Dow Jones Industrial Average ($DJI) both hit their 15 minute 200 period simple moving averages at the same time as the 10:45 ET correction period. The Nasdaq Composite ($COMPX) found support a bit sooner at the opening lows at 10:30 ET. The reaction off these support levels was decent, but not extreme. The Nasdaq experienced the strongest reaction, popping quickly to the 5 minute 20 sma. The greater strength throughout the morning, as well as this earlier and stronger move off support, made it easier for the Nasdaq to show the greatest strength throughout the afternoon as well.

After the initial move off support took place, hitting highs around 11:30 ET, the market began to pull back once again. This time, however, the momentum was very gradual and volume dropped on the pullback, creating a nice 5 minute buy setup that triggered early on in the afternoon. A continuation of this setup took place out of the 13:00 ET correction period and took the indices through their 15 minute 20 sma resistance levels. The Nasdaq also used this breakout to move to new highs on the day. It rallied all the way back into the zone of Monday's highs.

The market stalled once again shortly after 13:30 ET, but the correction was once again a mild one. The 5 minute 20 sma held as support, as did the lower trend channel, and at 14:30 a final wave of buying took place, bringing the S&Ps and Dow back into Monday's close as price resistance. This hit with the 15:00 ET correction period. I had been watching for a final move higher into the close, but the market rounded off at highs before pulling back and nullified that possibility. Although the 5 minute 20 sma and lower trend channel stalled the move on the downside at 15:30 ET, the roll over off highs made it easy for the support to break and the market to continued lower into the close and afterhours trade.

Both the ES (S&P 500 Emini futures) and YM (mini-Dow futures) were able to return to the zone of the intraday lows at about 16:15 ET, although the Nasdaq still managed to hold up well and only retraced to the 38% fibonacci level. The upside was then able to resume and the indices futures performed well into the late evening hours.

At the closing bell, the Dow had fallen 39.81 points, or 0.3%. It ended the day at 12,831. The S&P 500 lost 5.43 points intraday, or 0.4%, and closed at 1,390. The Nasdaq Composite gained 1.7 points, or 0.1%, and closed at 2,426. Top sectors included airlines, telecommunications, health care, and technology. Sectors performing poorly on Tuesday included gold, oil, pharmaceuticals, and natural gas.

Several big-name companies reported earnings ahead of the open on Tuesday, but they had very little impact on the market as a whole as the session began. MasterCard (MA) more than doubled its profits, reporting a 29% increase in revenue. It gapped sharply higher to break the upper trend line of its daily uptrend channel and closed higher by 13% (+$31.48). Corning Inc. (GLW) also rallied into Monday's open after it tripled its first-quarter profit on LCD sales. It pulled back off highs about 35 minutes into the session, but still gained 3.3% (+$0.85) on the day. BP (BP) has also been on a run lately with oil hitting highs and it jumped another 4.6% (+$3.20) on Monday after it beat analyst estimates.

Offsetting the gains made by the likes of MA, GLW, and BP was the rejection of Merck's (MRK) cholesterol drug Cordaptive by the Food and Drug Administration. MRK has been suffering a sharp decline since the beginning of the year and it took a hit with another 10.4% (-$4.30) loss by the end of the trading day on Monday after trying to find a foothold over the past month at lows.

Wednesday's session brings with it another Fed rates announcement. Expectations are for another quarter-point rate cut. Odds are beginning to increase that the Fed will pause its rate cut trend into the summer. There is some speculation that they will begin to do so on Wednesday, but overall most anticipate this to begin with the next meeting instead.

With any Fed day, however, the market tends to begin the session with an upside bias intraday and then a slowdown over noon and into the rate announcement. Then the market will experience several reactive waves, typically in groups of three with an initial reaction, followed by a counter-reaction, and then continuation of the initial move. Use a great deal of caution in pre-Fed and immediate post-Fed trade. The market is still in the trading channel it has been stuck in for the past two weeks. I am favoring a sharp breakdown once the channel gives way, but it can still hold for a few more days if there is not an extreme negative reaction to the Fed.

Dow Jones Industrial Average ($DJI)

S&P 500 ($SPX)

Nasdaq Composite ($COMPX)

Trade Wrapup - 20080428-29

Toni Hansen — Tue, 29 Apr 2008 15:53:00 +0000

20080428 - I was out of the office on Monday, so hence there were no trades or commentary for this day.

20080429 - Trade/Commentary Wrapup

11:28 NQ resistance here at prior highs (1931)
11:57 NQ first support coming off that pivot high (1927)
12:10 second support NQ (1925.25) "this is for the reversal off highs, not a buy"
12:18 "covering last of NQ" (1924.5 .. 1923.25 was low)

NQ Correction off highs

11:52 CF base at lows ($138.80) 5 min.
11:54 Mykonos : CF dying
12:13 CF 131 is initial target (hit 131.05 shortly thereafter)
12:14 hitting target zone
13:17 trailing stop hit on rest of CF (lows 130.52)

CF Short Setup

13:00 FLS watch for 5 min bull flags this afternoon
14:20 FLS off watch

FLS Desired Buy Setup - No trigger

15:03 GPRO base at highs 15 min on daily channel breakout looking to close feb gap
15:50 gonna watch that GPRO for tomorrow.... see if we can get a morning play on it

GPRO Buy Setup - Not yet triggered... watching for Wed. morning

15:05 YM hit yesterdays closing prices and serving as resistance on the 5 min

YM Resistance for correction

15:06 looking at 5 and 15 min indices for chance at another push higher before the close for a bull flag
15:06 the 5 and 15 min 20 sma is the support for a flag - nas will have the hardest time - has the greatest extension already
15:21 got rounded highs a bit here on the futs... that is not what i wanted to see for a flag

Market Pushes Higher on Light Volume

Toni Hansen — Tue, 29 Apr 2008 02:15:00 +0000

Good day! Trading was quite slow on Monday. Volume was light and the indices were stuck in a narrow uptrend channel throughout most of the session, creeping higher without any strong overall bias. We had been expecting the daily channel to hold early this week and Monday's session did not disappoint in that regard.

The week began relatively unchanged from Friday's closing levels. A bullish range formed out of the open with a slow retracement to the 5 minute 20 period simple moving average, but the market was unable to get going when the range attempted to break higher at 10:10 ET. Volume remained light for morning trade and the indices appeared glued to their 5 minute 20 period smas.

When the 11:00 ET correction prior hit the market attempted to break the support. This move also lacked conviction, however, and the morning congestion held. Momentum failed to shift to any significant degree and, although the indices returned to highs and even pushed through them into the early afternoon, they failed to to confirm any larger directional bias. The 5 minute 20 sma again became support and the market slowly crawled higher into 14:00 ET.

At 14:00 ET the indices hit their first substantial intraday resistance when the Dow tested the zone of last Thursday's highs. This corresponded to that 14:00 ET correction period and the market attempted another correction off the upper end of the day's trend channel. Although the downside momentum increased somewhat, it was even more nominal than the 11:00 ET pullback and found support at the 15 minute 20 sma.

This 15 minute 20 sma level had been keeping pace with the prices action since late morning and prevented the market from quickly breaking lower into the final two hours of trade. It was not enough, however, to prevent a larger correction from taking place. Whenever the indices creep higher the risk is also high that once support gives way it can do so rather quickly. Although the 15 minute 20 sma held at first, the indices congested along that level and at 15:15 ET the market broke down. In the final 45 minutes of trade the indices displayed the strongest momentum of the session, taking the market back to the lower end of the day's range with the S&Ps leading the selloff. The 5 minute 200 sma served as support just prior to the closing bell.

The Dow Jones Industrial Average ($DJI) fell 20.11 points on Monday, or 0.2%, and closed at 12,871 with 17 of its 30 components lower. The S&P 500 ($SPX) also lost ground, falling 1.47 points, or 0.1%, to 1,396. The Nasdaq Composite gained 1.47 points. It closed at 2,424.

Leading the news on Monday was an announcement by privately held Mars, Inc. to buy Wrigley Jr. (WWY) for $80/share. The purchase is to be backed by Warren Buffett's company, Berkshire Hathaway Inc. (BRK.A/BRK.B). WWY had closed on Friday at $62.45/share. The purchase price is based upon four times sales and 35 times WWY's 2007 earnings per share. Wrigley will become a subsidiary of Mars with Berkshire Hathaway making a minority investment. Additional financing will be provided by Goldman Sachs (GS) and J.P. Morgan (JPM).

Ford Motor Co. (F) was also making headlines on Monday. F has been in a strong uptrend since mid-March. The stock pushed past $8.50 on the 24th after it reported earnings for the quarter of $100 million, or 5 cents a share. It blew away estimates, gapping higher and continuing to run throughout the morning. Although it pulled back following this exhaustion move into the weekend, it jumped higher once again on Monday when Kirk Kerkorian's Tracinda announced that it planned to offer $8.50/share for up to 20 million of Ford's shares.

The focus over the next two days will be on the Fed. on Wednesday it will be announcing its latest rate decision. While many expect them to lower rates by another quarter of a point, it is quite possible that they choose to halt the rate cuts at this point. My stance on the market's outlook this week has not changed. I continue to expect back and forth action with a slight bullish bias pacing higher with the 20 day sma. This will leave the market vulnerable for a more rapid breakdown when the next daily correction off highs gets under way.

Dow Jones Industrial Average ($DJI)

S&P 500 ($SPX)

Nasdaq Composite ($COMPX)

Heavy Earnings News and Economic Data to Influence This Week's Trade

Toni Hansen — Mon, 28 Apr 2008 06:15:00 +0000

Good day! The market is going to be heavily influenced by another week packed full of earnings reports as well as some very hefty economic data. Stocks to watch on Monday include Verizon (VZ), which is expected to report first-quarter earnings of $0.62/share; Humana Inc. (HUM), which expected to report Q1 earnings of $0.48/share; and Tyson Inc. (TSN), which is expected to report a fiscal Q2 profit of $0.02/share. Visa (V) also reports on Monday and expected to report earnings of $0.45/share for fiscal Q2. ADM, BP, BNI, CFC, ODP, X, and VLO are top names which report on Tuesday.

The most notable event on the economic front will be Wednesday's Fed interest rate decision. It is anticipated by many that the Fed will once again lower interest rates, this time by a quarter percentage point to 2%, although there is no strong consensus that the the Fed will in fact make another cut at this time. Speculation is increasing that the Fed will hold off on further cuts for the time being as a result of the rather worrisome increase in the price of food, energy, and commodities. The continued decline in the value of the dollar is also widely cited as a reason for the Fed to halt rate cuts.

Early in the day on Wednesday, the Commerce Department will be releasing the first estimates for the first-quarter gross domestic product. Economists as a whole are expecting very little change in the overall numbers for this past quarter, with perhaps an exception in terms of some growth in exports and declines in residential and business investment.

On Thursday the Institute for Supply Management will be reporting its latest index reading. The monthly ISM index report is a national survey of the manufacturing sector which examines new orders, production, employment, deliveries, and inventories, and is one of the widely watched economic indicators. Overall, a reading over 50% indicates expansion, whereas a reading under 50% indicates contraction in the manufacturing sector. A reading in the low 40s tends to correspond to periods of recession. The ISM index for April is expected to drop to 48.0%, as compared to 48.6% in March. Since exports factor into the monthly reading, they will likely assist in holding that number above the low 40s for the time being.

The week will end with the latest unemployment data. During a recession, payrolls fall and unemployment levels rise. April marked the fourth month in a row that payrolls have declined. Job losses are expected to be most prevalent in manufacturing, construction, financials, and retail. Once again, strong exports are expected to inflate the numbers. The unemployment rate for April is expected to increase only slightly from 5.1% to 5.2%.

Going into Friday session I had been anticipating another day of back and forth activity without a strong intraday trend. Given the failed early upside breakout attempt the day before, I was particularly leery on the side of the bulls. The day began with very little difference between Thursday's closing and Friday's opening price levels in the major indices. Within the initial 15 minutes of trade the market held those levels. As the 9:15 ET correction period hit, however, the bears again regained control, continuing the selloff pattern which had began late in the prior session. This selloff continued into 10:00 ET.

At 10:00 ET the University of Michigan released its U.S. Consumer Sentiment index. It is currently at its lowest levels since 1982, falling from 69.5 in March to 62.6 in April. The data was no worse than had been expected. From 10:00 to 10:30 ET the indices corrected somewhat off their early morning lows. The 5 minute 20 period simple moving average served as resistance, but a 30 minute correction following 30 minutes of selling is typically not quite enough time to allow for the market catch its breath. The previous lows held as support and the indices fell into a base along those lows into the 11:00 ET correction period.

The downside continued at 11:00 ET, taking the indices to new intraday lows. This late morning breakdown brought them into the range from earlier in the week. I had been looking at the lower end of that range as support. The Nasdaq did make it back into the lower end of the range from Wednesday into Thursday morning, but the other indices held mid-range. The S&Ps had hit equal move support at that time on the morning's continuation when compared to the previous afternoon. This is a rather significant form of price support and the market was able to bounce off this level and back into the 5 minute 20 sma.

The shallower price retracement aided in the formation of a stronger late day reversal. It began with a large shift in momentum mid-day. The indices congested along the 5 minute 20 sma zone for two hours. The Nasdaq formed a double bottom on the 15 minute time frame and the market took off as the 14:00 ET correction period hit. This is a very common time of the day for major market moves to begin as well as end. The upside built on itself throughout the remainder of the afternoon with the Russell 2000 ($RUT) leading. The S&Ps and Dow followed, but the Nasdaq lagged.

The Russell 2k and S&P 5000 were able to make new highs on the session in the final hour of trade. The Dow Jones Ind. Ave. ($DJI) hit resistance at the morning highs with about 40 minutes of trade left. At this time the S&Ps had also ran into resistance at Thursday's highs and the Nasdaq Composite ($COMPX) was testing its open. All of these resistance zones hitting at once put a damper on the bullish sentiment and the buying stalled with the afternoon highs holding into the close.

The Dow ended the week higher by 0.4%. On Friday it gained 42.91 points, or 0.3%, and closed at 12,891.86. American Express Co. (AXP) was one of the top gainers after it reported a first-quarter loss that was less than had been anticipated. The S&P 500 closed higher on the week by 0.5%. It had been in negative territory, but the 9.02 point gain on Friday added 0.7%. It closed at 1,397.84. The Nasdaq Composite gained 0.8% on the week as a whole, but it closed lower on Friday by 0.2%, or 5.99 points, at 2,422.93. Leading sectors on Friday included energy, broker/dealers, and banking, while technology stocks led the decliners.

I think that we can continue to see the market step higher early this week. I expect that there will still be a great deal of overlap in price from one day to the next without the indices adding much difference between the current price levels and the 20 day sma. This is about 35-40 points on average in the Nasdaq and about 120 points in the Dow. A market which creeps higher can turn very quickly, so this is something that should be kept in mind given this scenario.

Dow Jones Industrial Average ($DJI)

S&P 500 ($SPX)

Nasdaq Composite ($COMPX)

Economic Reports and Earnings Events This Week : Apr. 25 - May 2

Toni Hansen — Sat, 26 Apr 2008 02:44:00 +0000

Economic Reports and Events This Week

Monday, April 28, 2008
10:30a.m. Apr Dallas Fed Mfg Production Index. Previous: 13.6.

Tuesday, April 29, 2008
7:45a.m. ICSC Chain Store Sales Index.
8:55a.m. Redbook Retail Sales Index.
10:00a.m. Apr Conference Board Consumer Confidence. Previous: 64.5.
5:00p.m. ABC/Wash Post Consumer Conf.

Wednesday, April 30, 2008
8:30a.m. 1Q Advance GDP. Previous: +0.6%.
8:30a.m. 1Q Employment Cost Index. Previous: +0.8%.
9:45a.m. Apr Chicago PMI. Previous: 48.2.
10:30a.m. Crude Inventories
2:15p.m FOMX Policy Statement

Thursday, May 1, 2008
8:30a.m. Initial Jobless Claims For Apr 26 Week.
8:30a.m. Mar Personal Income. Previous: +0.5%.
8:30a.m. Mar Personal Spending. Previous: +0.1%.
10:00a.m. Apr ISM Manufacturing Business Index. Previous: 48.6.
10:00a.m. Mar Construction Spending. Previous: -0.3%.
10:00a.m. DJ-BTMU Business Barometer For Apr 12.

Friday, May 2, 2008
8:30a.m. Apr Nonfarm Payrolls. Previous: -80K.
8:30a.m. Apr Unemployment Rate. Previous: 5.1%.
10:00a.m. Mar Factory Orders. Previous: -1.3%.

Key Earnings Announcements This Week:

Monday, April 28, 2008
Before: ACV, ARLP (?), BEAV, BWP, CG, CNA, CORS (?), COT, DCO, DEP, ENDP (?), EPD, FSNM, HUM, IHP, KDN, LTR, MGLN (?), MAG, MC, MOG.A (?), NTY (?), ONB, PVTB, RSH (?), RDWR, SSW, SOHU, SYY, TSN, VZ, V, WWY
After: ACTS, ACTU, AATI, ALGT, AMCS (?), NLY (?), ATHR, AXS, BLDP, BKHM, CHH, CGNX, CVD, DGII, EDR, EEP, FIC, FLS, FTI, FELE, GPRO, GERN (?), HGR, HIG, HCP, ININ, IVAC, JDAS, MTW (?), MIG, MTH, MCHP, PRE, PBI (?), PCL, PPS (?), STR, RADN (?), RCII, RKT, SBCF, CONO, SFN, STM, TXRH, TSS, TRID, TZIX (?), UCTT, VECO

Tuesday, April 29, 2008
Before: CAS, AG, ANPI, ADM, ARM, ASH, AVP, BLC, BMS, BYD, BP, BNI, CRS, CEVA, GIB (?), CVG, CYNO, DHX, DXYN, ENR (?), FDP, GKSR, SVHR, GPI, HSII, HEP, HUN (?), ICLR, KNSY, KSWS, LDR, LCAV, LEA, MSO, MAS, MA, MHP, MHS, MYGN (?), NURO (?), NXY (?), ODP, GLT, PAG, PER, PCZ, RDS.A, SMG, SEPR (?), SINT, SPG, SIRI (?), SAH, TSM, TECH (?), TFX, TIN, TPP, TEVA (?), TSCM, TT, TUES, X, UA, VLO, VSH, WMI, WEC
After: ACE, ADVS, ATAC, ALGN, ECOL, AMMD, ARRS, AUDC, AVR (?), BMRN, BXP, BRE, BTUI, BPL, CSCD, CTV, CYH, CNXT, CTS, CYBS, DVA, DENN (?), DRH, DBTK, DWA, DRC (?), EGLT, EQ, EPIC, EQY, ESRX, FEIC, FLEX, FORM, GGP, BGC, GMKT, HRS, HSTX, HS, HIMX, HTCH, JLL (?), KEYN, KFRC, LFL, LFG, XPRT, LNC, LAD, LIZ (?), LNET, MASI, MOH, MPWR, MRH, MOSY, NANO, NATI, NCIT, NETL, HAL, OIS, OTEX, PACR (?), PNRA, PDFS, PLNR, PLT, RSYS, RNR, RUTH (?), SVVS, SCSS, SMI, SHOR, SWIR, SIMO, SSTI, SNWL, SPSS, STAR, SDXC, TE, TRMA, TRLG, VIMC, VPRT, WTS

Wednesday, April 30, 2008
Before: ACW, ALU, ALEX, ALXN, AMED, APU, AACC, AUXL, AVA, BEC, BLT, CACH, CBI, CDI, CNP, CBB, CINF, CL, CEG, COCO, CRY, CMI, DF, ELON, EEFT, FSLR, FORR, FPL, FTD, GRMN, GEO, GOL, GLF, HW, HNT, HES, HPT, INCY, IR, IACI, IPG, IP, IONA, JNY, K, KFT, LFUS, MHO, MWV, MPS, NOV, NTMD, NJR, NOVN, OZM, ZEUS, ORCT, PTI, PNW, PLUG, PMI, PG, RAS, RBC, RHB, RAI, ROC, RSTI, SAP, SEE, SLAB, SPIL, SKYW, SO, SPW, STRA, BRLC, TLM, TSTY, TWX, TWC, TKR, TRS, TRX, TRW, UGI, UIS, UMC, VPHM, VC, WBC, WMAR, WST, WXS
After: ARAY, AKAM, AYE, AIQ, AW, AMKR, ARNA, AHT, ATML, AVB, CAR, AXTI, BLOG, BDN, CBT, COG, CAI, CALD, CBL, CDR, CTX, CEDC, CNQR, DCGN, XRAY, DNEX, DTE, DRCO, EQR, FARO, FISV, FBN, GNK, GMR, GHDX, ROCK, GLUU, GW, GSIG, HVT, HLX, INTX, IRBT, ISTA, ITRI, JDSU, KONA, LHCG, LOOP, MANT, MCGC, MCRS, MIL, MIPS, MRT, MUR, NVT, NBIX, NEWP, NVEC, OIIM, OII, ODSY, OMTR, OKE, OKS, OI, PSEM, PAA, PPO, PRU, PSYS, RADS, O, RNOW, SAF, SGMO, SBAC, SCRX, SFLY, SBUX, STNR, SUNH, SYMC, SMMX, TTEK, TWTC, TLGD, TRN, TTMI, ULTI, UDRL, UNM, URS, VIRL, VLCM, WCAA, WGL, WSH, XFML

Thursday, May 1, 2008
Before: SMLC, ABH, ASF, ADLR, EYE, AMRI, LNT, AMCS, ANSS, APA, AHG, ARQL, AIZ, ADBL, ADP, BKRS, BNT, BBI, BSC, BCO, BRKR, BKC, CVC, CALP, CAM, CNQ, CPLA, CSE, CAPA, CAH, CPHL, CBZ, CTIC, CETV, CTL, CKP, CSK, CI, CLX, CGPI, CMCSA, CITP, CDC, COWN, CUB, CVS, DWSN, DNR, DSX, DSCO, DTG, D, DPZ, DRQ, EK, EFJI, EMS, ELMG, EPL, NPO, ENZN, EQT, EXPE, XOM, FRP, FAF, FE, RAIL, GET, GEL, GTIV, GNA, GIL, GMCR, GHL, HAE, HTV, HPY, HP, HERO, HOS, HWCC, ITWO, ICON, ICTG, IFLO, IPSU, IART, IFF, ITG, IWA, IRM, JRC, KBW, KNDL, KIM, KNOL, LB, LANC, LPNT, LKQX, LOJN, CLI, MRO, HZO, MFA, MDS, MSA, MINI, NNN, NRP, BABY, NNDS, NEWS, NBL, NRG, NUS, NMX, OMX, OMG, ORCH, OFIX, OSK, OSIS, PTIE, PMTI, PRX, PKE, PCAP, PTEN, PCCC, PDGI, POZN, PDE, PEG, QCCO, PWR, KWK, RVSN, RRI, REV, RDC, SGK, SNN, SHOO, SSYS, SXCI, TWTI, TOC, THOR, THI, TBL, TWGP, TYC, TEL, ULBI, UNT, UTHR, VCI, VRX, VNDA, VICL, WPI, WNR, WLK, WMB, WPZ, WPL, WYN, XEL, XMSR
During: EPEX, FNET
After: ABAX, ACS, ARE, ACLI, AFR, ACAP, ARII, ARP, AMSF, ASCA, AOC, AMCC, ARTE, ATO, AVNX, RATE, BARE, BE, BEBE, BGFV, BBND, BPHX, BVN, CAB, CAMD, ELY, CPT, CBEY, CTLM, CAPH, CPHD, CEM, CHK, CQB, CRUS, COGT, CSTR, FIX, SCOR, CRAY, DRIV, DLB, HILL, DNB, BOOM, DIET, EHTH, RDEN, ENH, EVC, EOG, ERES, ESPD, EXAR, EXEL, FCN, GMST, GYI, GFIG, GCFB, HNSN, HL, HIFN, HIW, HMN, HYC, IDSY, IMMR, IUSA, IDTI, IBI, IN, ITMN, IWOV, SWIM, INXI, DMX, JSDA, KCP, KFN, LQDT, LPSN, LAVA, MXWL, MEDX, MET, MIDD, MWY, MNST, MORN, NABI, NCMI, NFG, NATL, NTCT, N, NR, NHWK, NXG, NOVA, NVTL, ORH, OSIP, PDLI, PEET, PSPT, PGTI, PHTN, PROS, PSA, QLGC, RMKR, RMD, RVI, SONE, SNTS, SGMS, SCUR, SGTL, SMSI, SNCI, FIRE, SRSL, SM, STAA, SPF, STAN, JAVA, SHO, SPN, SPSX, TWLL, TX, TRSA, THRM, TWPG, TMA, CLUB, TGI, TMWD, UPL, URI, USTR, CHIP, PAY, WLT, WWIN, WBSN, WRI

Friday, May 2, 2008
Before: AGU, ALE, AMT, AIV, B, BWA, CSAR, CVX, ED, DSPG, DUK, EVVV, FSS, FRPT, HPOL, ICE, SFI, KBR, LZ, MDU, NI, NT, NWN, ASGN, PPL, SRE, VIA.B, WY, WHQ
After: OTTR

Note: All economic numbers and earnings reports are in line with those compiled by Briefing.com. Occasionally changes will occur that are made after the posting of this column and some companies have not confirmed their time, so always double check when taking positions overnight during earnings season! (?) = Not yet confirmed at the time the list was compiled.

Market Rallies in Thursday's Trade

Toni Hansen — Fri, 25 Apr 2008 04:48:00 +0000

Good day! Over the past week the market has been correcting off this month's highs. The market had established a two-wave pullback on the 60 minute time frame into Tuesday's lows. This created the beginning of a buy pattern on that time frame. The activity from Wednesday upheld this pattern's development despite the downturn off the morning highs and gradual momentum on the upside into the close. What this did create, however, was a smaller 15 minute short setup in the form of a type of Avalanche setup. When the market hugs a support level with a lot of choppy trade, it become easier for that support to break.

The market opened relatively unchanged on Thursday. The channel from the prior afternoon along the 15 minute 20 period simple moving average gave way early in the session. Now, in addition to the larger 60 minute two-wave buy, the market was also forming a smaller setup of the same type on the 15 minute time frame. The drop for the second wave of selling on the 15 minute, however, was not as severe as it had been on the 60 minute. The indices rolled over at intraday lows between 10:00 and 11:00 ET and broke sharply higher at that time.

Whereas the market had stalled on the 60 minute time frame before offering a continuation of the larger buy setup, the indices did not experience any similar misgivings on Thursday and once the pattern triggered it continued to move decisively higher into the early afternoon. At about 12:15 ET the Dow Jones Industrial Average ran into the targeted highs from Friday. The Nasdaq had already tested those highs on Wednesday, so this breakout was from a third test of that resistance level. As many of you may already know, a third test of support or resistance is the one which is most likely to break.

At 12:30 ET the Nasdaq Composite began to correct. Volume dropped off as it slowly pulled back to form a bull flag on the 5 and 15 minute time frames. The S&Ps and Dow also had slowed their ascent at this time, however, they made two more tests of highs into 13:00 ET. Often this pattern will create a larger reversal, however, the market was still dealing with larger time frame bullish patterns. Volume dropped off sharply as the market pulled back slightly into 13:30 ET. Soon afterwards the correction broke higher to trigger another wave of upside on the 5 and 15 minute time frames.

The afternoon breakout was too premature to allow the market to create as strong of a continuation move as the initial late morning rally. It was enough, however, to bring the S&P 500 into its highs from Friday. That resistance hit just before 14:30 ET and all three of the indices rounded off at highs once that occurred. The momentum shift confirmed at 15:00 ET when a slower ascent off the 5 minute 20 sma began, leading to a breakdown in the final 45 minutes of trade which continued afterhours until all three of the major indices had given back a large percentage of their gains off the morning lows. The S&Ps and Dow fell back 50%, while the Nasdaq returned to approximately the 62% Fibonacci retracement level. These support levels held throughout the remainder of Thursday's afterhours trading.

Thursday's primary session closed with a gain of 85.73 points, or 0.7%, in the Dow ($DJI). It ended the day at 12,848.95. American International Group, Inc. (AIG) led the gainers with a 7.09% rally after it lifted its profit forecast for the year. General Motors Corp. (GM) followed with a 5.59% gain following the surprise earnings from Ford Motor Co. (F) (+11.7%). The S&P 500 ($SPX) closed at 1,388.82, up 8.89 points, or 0.6%. The Nasdaq Composite gained 23.71 points, or 1%, and closed at 2,428.92. I am expecting Friday to be another choppy day. A pullback into the lower end of the daily channel again is quite possible by mid-day. Strong upside will be difficult in the indices as a whole.

In economic news on Thursday, the Labor Department announced that first-time claims for state unemployment fell 33,000 to 342,000. This is its lowest level in two months. U.S. durable goods orders gell 0.3% in March. This was as anticipated and February's data was revised higher. Meanwhile, sales of new homes fell 8.5% in March. This hit a 17-year low and was weaker than anticipated.

Dow Jones Industrial Average ($DJI)

S&P 500 ($SPX)

Nasdaq Composite ($COMPX)

Market Post Gains, but Fails to Hold Highs

Toni Hansen — Thu, 24 Apr 2008 07:53:00 +0000

Good day! Tuesday's trade left the market with a bullish bias into Wednesday morning. With the first-quarter earnings season now fully underway, however, the bias from the previous afternoon does not always follow through well into the next day. This time, however, earnings assisted this bias. Boeing Co. (BA) led the Dow's gainers after it reported a 38% profit increase. It gained 4.49% on the day. Broadcom (BRCM) was another major winner on Wednesday, adding 16.3% following its first-quarter results Tuesday afternoon.

The session began on Wednesday with another modest gap. This time it was on the upside. The open took place at price resistance from the late-morning congestion on Tuesday. This resistance held and the gap began to close. The S&P 500 ($SPX) and Dow Jones Ind. Ave. ($DJI) both closed their morning gaps rather quickly. The Nasdaq Composite ($COMPX), while it also fell out of the open, did not quite fill the gap completely, but it made an honorable attempt.

The S&Ps and Dow found support about 20 minutes into the day at the 5 minute and 15 minute 20 period simple moving averages. Prices rounded off at this support over the next 20-30 minutes. 5 minute bull flags triggered in the S&Ps and Dow out of the 10:15 ET correction period, while the Nasdaq triggered a two-wave continuation pattern in the form of a small cup-with-handle on the 2-5 minute time frames. This continued the upside bias that the market had in play heading into the day and the indices rallied steadily higher to close Tuesday's morning gap.

The morning rally took the Nasdaq back to its highs on the daily time frame which we had been targeting as resistance. The S&Ps and Dow did not quite make it back to Friday's targeted highs, however. After closing the gap around 11:45 ET, the market began to pull back. The momentum shift was enough on the smaller time frames to create a larger reversal. It confirmed when the indices formed a 5 minute Avalanche pattern between 11:30 and 12:00 ET and triggered into the 12:00 ET correction period with swift and decisive downside follow through.

The mid-day descent continued without interruption for more than half an hour. The momentum was some of the strongest we have seen on the downside in several weeks, but the volume was not substantial. The degree of the selling was still enough to take the market back to the area of the morning lows. The S&Ps surpassed them with a strong flush, but the Nasdaq slowed as it came into the early morning congestion and its 15 minute 20 sma and 5 minute 200 sma support.

The remainder of the session on Wednesday was quite choppy. The S&Ps and Dow hugged the lower end of their 15 minute 20 smas, while the Nasdaq hugged the upper end of its own. All three indices crept higher along the 5 minute 20 period sma, weaving back and forth, above and below it, into the close. This made afternoon trading in the indices themselves difficult throughout the majority of the afternoon.

The Dow closed higher on Wednesday by 42.99 points, or 0.3%, and 12,763.22. 18 of its 30 components were positive. The S&P 500 also gained 0.3%, or 3.99 points. It closed at 1,379.93. The Nasdaq Composite rallied 1.2% (28.27 points). It closed at 2,405.21.

The slow ascent throughout the afternoon made it easy for the indices to fall apart immediately in afterhours trade. The index futures on all three of the indices dropped to the zone of the session's lows before finding support around 21:00 ET. They were then able to turn over coming off that support and gained ground throughout the early morning hours on Thursday. With things where they stand now, the S&Ps and Dow are still within grasp of a retest of those Friday highs, however, it would not take much of a momentum shift for the correction off those highs to accelerate as they did several weeks ago.

Some of the names to watch out for on Thursday are as follows. Apple (AAPL) and Amazon (AMZN) both posted quarterly earnings on Wednesday after the close. AAPL forecast Q3 earnings of $1/share, which was under estimates, as were its quarterly sales expectations. AMZN's net earnings rose 30%, or 34 cents a share as compared to the 33 cent/share estimate. Its revenue also came in slightly ahead of expectations. Both stocks should be more active on Thursday followed this data.

A number of companies will also be reporting ahead of the open on Thursday and likely to experience strong intraday reactions. 3M Co. (MMM) is forecast to report a $1.36/share profit. ConocoPhillips (COP) is anticipated to report a $2.40/share profit. Dow Chemicals (DOW) is expecting a profit of 94 cents/share. For other earnings to come, please check the list below.

Dow Jones Industrial Average ($DJI)

S&P 500 ($SPX)

Nasdaq Composite ($COMPX)

Trading Journal Template

Toni Hansen — Thu, 24 Apr 2008 02:29:00 +0000

Hey gang,

The following is a copy of the trading journal template I designed a number of years back. To this day it remains a great starting point for any journal to help you analyze your individual trades and to use as a starting point for cross-trade analysis. Note: This journal template is copyrighted. I've come across copies of it on other sites since I created it, but if you choose to post it into another format, please be sure to reference the source! Thanks!

TRADING FROM MAIN STREET
DAILY TRADING JOURNAL
Please make sure you fill in every field. The more information you provide, the more it will help you when reviewing your logs.

DATE:
SYMBOL:
SECTOR (if known):
BUY/SHORT (circle one)
TYPE OF SETUP:

ANALYZING THE POSITION:
PROS:

CONS:

CURRENT MARKET CONDITIONS:

EXPECTATIONS:
PRICE TARGET:
REASON FOR PRICE TARGET:

ANTICIPATED RISK TO REWARD:
ANTICIPATED RISK LEVEL (rate 1 to 10 with 10 being high risk and 1 low risk):

ENTRY TIME(S):
ENTRY PRICE(S):
REASON FOR ENTRY AT THAT PARTICULAR TIME AND PRICE:

STOP PRICE AND WHY IT'S SET AT THAT PRICE (also note when the stop was adjusted and why):

EXIT TIME(S):
EXIT PRICE(S):
REASON FOR EXIT:

OUTCOME OF TRADE:
EXPECTATIONS MET? YES/NO (circle one)
TRADE ANALYSIS (Include thoughts on the trade such as what could have been improved, what you felt you did correctly, areas you may need to work on, etc.):

ATTACH A SEPARATE PRINT OUT OF ALL RELEVANT CHARTS FOR THIS TRADE. INCLUDE CHARTS FOR THE OVERALL MARKET WHEN APPROPRIATE. HAVING A VISUAL REFERENCE IS AS IMPORTANT AS A WRITTEN ONE.

U.S. Market Falls on Slew of Disappointing Earnings

Toni Hansen — Wed, 23 Apr 2008 07:41:00 +0000

Good day! The market had a tough session on Tuesday on the heels of disappointing earnings reports. The top Dow decliner was DuPont Co. (DD). The chemicals company beat by $0.03/share, reporting revenues that were in line, however, the company also warned that weakness in construction and automotive markets would hinder growth. DuPont fell 4% by the end of the day. Texas Instruments (TXN) was another major player to announce early this week. It had reported earnings after the close on Monday. A poor outlook for the second quarter led to a drop of 5.8% on Tuesday. Telecommunications networking company Tellabs (TLAB), which has been in a steady decline since the middle of last year, was hit further after it reported lower first quarter profit and a disappointing second quarter outlook. It lost 13.8% of its share value on Tuesday.

The cumulative effect of the earnings data which came out between Monday afternoon and Tuesday morning created a modest downside gap in the indices. This gap took the Dow Jones Industrial Average ($DJI), S&P 500 ($SPX), and Nasdaq Composite ($COMPX) under the 15 minute 20 period simple moving average. This was the same zone as the afternoon lows in the S&Ps and Nasdaq from Monday and served as a solid resistance zone to begin the session. Early activity in the S&Ps and Dow also brought those two indices under their 5 minute 200 period smas.

The indices fell into a period of congestion following the morning gap which lasted throughout all but the final 15 minutes of morning trade. Volume dropped as the congestion narrowed following 10:30 ET with the indices basing at the intraday lows. The congestion finally gave way at 11:45 ET on strong downside into new intraday lows. This created a second wave of selling on the 30 minute time frame for the S&Ps and Dow. The downside continued until these indices had established an equal move as compared to the selloff from Friday afternoon into Monday's morning lows.

The mid-day downside also took the form of two waves of selling. The first wave took it into the 12:00 ET correction period. It stalled there for about 15 minutes and then continued into the 13:00 ET correction period. This was where the larger equal move level hit and the S&P 500 and Dow were able to test the closing highs from the 17th, ahead of Friday's upside gap. This price support, the equal move support, and the correction period aligned with slowing downside momentum to create a high probability that the market would form another correction off support on the 15 to 30 minutes charts as the afternoon progressed. Since the prior correction took most of Monday's session to form, the odds were high that the correction on Tuesday afternoon would hold into the close. It could either create a bear flag to continue the downtrend, or this could be the second wave of a two-wave pullback and lead to a move back into highs on Wednesday.

The market did congest throughout the remainder of the day. There was a slight upside bias, but nothing to suggest the correction could not be leading into a larger bear flag. This was true, at least, until the final hour of trade. At that point the upside momentum picked up somewhat and the indices congested near afternoon highs until the final 15 to 20 minutes of the day. At that point a Phoenix pattern on the 5 minute charts broke higher.

The Dow closed lower by 104.79 points, or -0.8%, at 12,720.23. The S&P 500 fell 12.23 points, or -0.9%, to end the session at 1,375.94. The Nasdaq Composite lost 31.10 points, or 1.3%, and closed at 2,376.94.

The late day Phoenix setup followed through into afterhours trading with a strong surge higher that took the indices back into the congestion from the morning's activity. The bias remains bullish into Wednesday morning with Friday's highs as the larger time frame resistance. Once again, however, opening data is going to be much more reliable in offering a more accurate intraday bias than the afternoon data from the previous session.

Dow Jones Industrial Average ($DJI)

S&P 500 ($SPX)

Nasdaq Composite ($COMPX)

Trade Wrapup - 20080421-22

Toni Hansen — Tue, 22 Apr 2008 16:18:00 +0000

Hey gang... I am out most of the week, but have been popping in every once in awhile to post some things I'm seeing as I work on other projects.

Yesterday the only call I posted was Ryder Sys Inc. (R) for a breakdown short. It triggered early this morning after basing throughout yesterday at lows despite larger market strength.

R Short Setup

Today:
10:32 Futures support call for a reversal off lows as a bounce. This call was based upon a 100 tick momentum reversal pattern forming in the S&Ps and Dow and went on to hit the second target objective on this type of play.

Support

10:38 FCX given as base at highs for an upside breakout. Pattern breakout type A. It rallied for more than a point to hit initial target objectives at $121, but larger target of $122 was not met and the remainder was closed with a trailing stop. (This update posted at 11:22 ET)

FCX Buy Setup

12:28 Notice that IPI triggered a "D" style breakout. It triggered over $49.30ish and was trading about $49.75 when I posted, but was given as to watch for cont. of the pattern since this often will pullback a little and then go again. It is currently 12:31 and it it pulling back. $52.35 was given as target zone. This is an IPO though, so it can be rather volatile.

For information on A, B, C, D, or Z template patterns, please see http://tradingfrommainstreet.com/images/roomexamples/BREAKOUT_TEMPLATE.gif
The green circle is the entry with the red bar as the stop.

IPI Buy Setup

12:34 ET - ES Support Levels:
1373.68 ish is ES 62% fib retracement back to 17th lows
about 1370.31 is the 38% retracement back tothe lows of the 15th on the ES
it is also the zone of lows from the 18th
so those are some upcoming support levels to watch coming up
1366.75 is close from the 17th for the gap closure on the ES

13:14 YM Support: "YM just hit 38% retracement back to the 15th lows... also the price congestion from 16th highs and 17th afternoon into 18th morning... this was also equal move support in YM compared to drop from Friday highs to Monday morning lows"

13:33 NFLX low level base at whole number support from $30 with pattern for more downside.

NFLX Short Setup

Larger correction on 15 min time frame
13:33 charlie1 : Toni..do u see a rally this afternoon? inquiring minds want to know!
13:34 Toni-WeekOff : well we have a two-wave pullback now on the futures on the 15 min time frame
13:34 Toni-WeekOff : equal move levels hit 13
13:34 Toni-WeekOff : so this is a major support zone 13:34
Toni-WeekOff : need momentum to shift though
13:35 Toni-WeekOff : a 2B at lows would be good
13:35 Toni-WeekOff : if it can do that then the odds will be higher for an afternoon rally that is not quite as choppy
13:35 Toni-WeekOff : that is a risk if it just goes from here since the selling pace was pretty steep
13:36 Toni-WeekOff : the 15 min 20 sma is going to be resistance as it was yesterday
13:36 Toni-WeekOff : definitely expecting a larger 15 min correction though
13:36 charlie1 : good i can work with that!

14:23 Toni-WeekOff: watching this correction in the futures...might just turn into a 15 min bear flag.... still lots of room to correct but trying to correct more through time so far
14:23 charlie1: is selling today on light or heavy vol?
14:24 Toni-WeekOff: volume is a little heavy but not much
14:24 charlie1: good
14:25 charlie1: nothing to worry about unless it was heavy vol today
14:25 Toni-WeekOff: for judging time of this correction... look at ES or YM yesterday from lows to close
14:25 Toni-WeekOff: then compare to the move from
13:0014:26 Toni-WeekOff: can take up to that long if this turns into a flag
14:27 Toni-WeekOff: still too early to really say and have room for some more upside in he interim

13:41-Toni-WeekOff : NFLX going
13:42-xr3 : IPI too
13:42-Toni-WeekOff : :)
13:42-Toni-WeekOff : looks good $48.80 is support zone
13:44-Toni-WeekOff : 52.30is IPI target.. whole numbers will be resistance...so reasonably would be 52 area
[13:45- Toni-WeekOff : NFLX the 50 cent levels are price support[13:45] missed but still a buy
13:45 -chastain : IPI b/o
13:46 -Toni-WeekOff : initial target support here NFLX... looking for about 29 rest

13:55 the ISRG momo reversal as a swing from the 11th hit second target level btw.. did it yesterday but still trading there today (was short from between 338-340, depending on trigger used... trading 279 zone with lows in 275 zone)

I will try to find time later today to post some of the charts for the calls on Friday and this week so far. I will not be in the trading room much this week, but will be back next week all day. It's been a pretty nice week thus far for activity thanks to earnings! Wishing you guys well!

Market Corrects Following Last Week's Run

Toni Hansen — Tue, 22 Apr 2008 05:08:00 +0000

Good day! Although the Nasdaq Composite ($COMPX) held up rather well in Monday's session, the S&P 500 ($SPX) and Dow Jones Industrial Average ($DJI) struggled to recover early losses. Both had gapped lower by a decent amount at the open following weaker-than-expected earnings from Bank of America (BAC). BAC fell 2.5% after reporting that earnings fell 77% for the first quarter. By the close of the day the Dow had still lost 24.34 points, or 0.2%. It ended the session at 12,825.02.

American Intl Group Inc. (AIG) (-3.5%) and BAC were the two largest losers in the Dow, but Caterpillar Inc. (CAT) also posted losses over 2% (-2.29%). General Motors Corp. (GM) was the brightest of the bunch. It gained 5.7%. Microsoft (MSFT) came in second with a gain of 1.4%. In the other indices, the S&P 500 lost 2.16 points, or 0.2%, and closed at 1,388.17, while the Nasdaq Comp. gained 5.07 points, or 0.2%, and closed at 2,404.04. While financials dragged down the Dow and S&Ps, tech stocks helped the Nasdaq stay above water.

Most of the gains established by the market and the recovery from early morning losses took place in the second half of the trading day on Monday. The session began with a correction off last week's highs. The market bounced slightly following the downside gap and the Dow and S&Ps made it back to Friday's lows, while the Nasdaq closed its gap and found resistance at the 5 minute 20 period simple moving average. These price resistance zones hit about 20 minutes into the day and since the momentum was about average the indices held that resistance and were able to again push to new intraday lows.

The morning downside continued into 10:30 ET. The Nasdaq slid down its 5 minute 20 sma throughout the move, creating higher odds that the resistance would break to the upside. The S&Ps and Dow had a bit stronger downside momentum, but the selling stalled at the same time. A double bottom followed and when the 11:00 ET correction period hit the market reversed and began to move higher.

Most of the action on Monday was rather choppy in the indices as a whole. Although the market moved higher throughout the remainder of the morning and most of the afternoon, there was a lot of overlap in prices from one bar to the next on both a 5 and 15 minute time frame. The Nasdaq broke to new intraday highs very early on in the afternoon. When the S&Ps and Dow came into morning highs, however, and the Nasdaq hit the zone of Friday's highs, the bulls retreated. The market pulled back quickly off the afternoon highs, but was able to round off again at morning support between 14:00-14:30 ET and make their way to new highs on the day once more before the bell.

Although the index futures are down again afterhours, there is still some room for upside on Tuesday. The Nasdaq already began a third wave higher on the 60 minute time frame, so it has room to complete that move, but then I expect things to turn over into the afternoon and head back to the downside. Earnings are a major influence at present when it comes to where the markets are opening each morning, so I would suggest not relying as heavily upon postmarket analysis in the evenings,. Instead, come in ahead of the open each day to get a feel for where things stand as a result of the earnings and economic data that comes out each morning.

Dow Jones Industrial Average ($DJI)

S&P 500 ($SPX)

Nasdaq Composite ($COMPX)

Note

Toni Hansen — Tue, 22 Apr 2008 01:42:00 +0000

Hey Gang,

I'm taking the week off from trading to deal with some other things that have come up, but will be back next week with the wrapup! I will still be doing the nightly action letter, however.

All my best,
Toni