China GDP inline with expectations plus retail sales better than forcast..Futures up worldwide
Stock Market Today : July 9th - 13th - Page 19
Even though these were the levels I wanted to wait for to get long, I can't help but to be a little bit skeptical. SO many people are looking for a bounce here that it seems ridiculous to expect the same.
I'm starting to believe that we have a better chance doing somewhat of a double bottom then continue up from here. Price action wise, the double bottom would be the only savior to this bearish continuation pattern that's currently playing out.
As always, the micro picture takes center stage, and I'll be trading smaller fractal chart with the larger picture kept in mind. My short term target would be the attempt from buyers to bring it back in the channel we broke below back up near 1350. I'll be watching price closely and be ready to pounce on the short side in case the standard deviation of this channel isn't overextended and it's indeed as ugly as it looks.
Here's a good article about bearish continuation patterns if you're looking to educate yourself.
The Measured Move is a three-part formation that begins as a reversal pattern and resumes as a continuation pattern. The Bearish Measured Move consists of a reversal decline, consolidation/retracement and continuation decline. Because the Bearish Measured Move cannot be confirmed until after the consolidation/retracement period, it is categorized as a continuation pattern. The pattern is usually long-term and forms over several months.
Prior Trend: For the first decline to qualify as a reversal, there must be evidence of a prior uptrend to reverse. Because the Bearish Measured Move can occur as part of a larger advance, the length and severity of the prior decline may vary from a few weeks to many months.
Reversal Decline: The first decline usually begins near the established highs of the previous advance and extends for a few weeks or many months. Sometimes this reversal pattern can mark the initial trend change, other times a new downtrend is established by new reaction lows or a break below support. Ideally, the decline is fairly orderly and lengthy with a series of declining peaks and troughs that may form a price channel. Less erratic declines are satisfactory, but run the risk of turning into a different pattern.
Consolidation/Retracement: After an extended decline, some sort of consolidation or retracement can be expected. As a retracement rally (or reaction rally), prices could recoup 33% to 67% of the previous decline. Generally speaking, the bigger the decline is, the bigger the reaction rally. Some retracement formations might include an upward sloping flag orrising wedge. If the formation turns out to be a consolidation, then a continuation pattern such as a rectangle or descending triangle could form.
Continuation Decline - Length: The distance from the high to the low of the first decline can be applied to the high of the consolidation/retracement to estimate the length of the next decline. Some technicians like to measure by points, others in percentage terms. If a security declines from 60 to 40 (20 points) and the consolidation/retracement rally returns the security to 50, then 30 would be the target of the second decline (50 - 20 = 30). Using the percentage method, the decline from 60 to 40 would be -33% and projected decline from 50 would be 16.50. (50 X 33% = 16.50 : 50 - 16.5 = 33.50). Deciding which method to use will depend on the individual security and your analysis preferences.
Continuation Decline - Entry: If the consolidation/retracement forms a continuation pattern, then an appropriate second leg entry point can be identified using traditional technical analysis rules. However, if there is no readily identifiable pattern, then some other signal must be sought. In this case, much will depend on your trading preferences, objectives, risk tolerance and time horizon. One method might be to measure potential retracements (33%, 50% or 62%) and look for short-term reversal patterns. Another method might be to look for a break below the reaction low set by the first decline as confirmation of continuation. This method would make for a late entry, but the Measured (bear) Move pattern would be confirmed.
Volume: Volume should increase during the reversal decline, decrease at the end of the consolidation/retracement and increase again during the continuation decline. This is the ideal volume pattern, but volume confirmation is not as important for bearish patterns as it is for bullish patterns.
More than one pattern can exist within the context of a Bearish Measured Move. A double top could mark the first reversal and decline, a price channel could form during this decline, a descending triangle could mark the consolidation and another price channel could form during the continuation decline.
During multi-year bear markets (or bull markets), a series of Bearish Measured Moves can form. A bear move consisting of three down legs might include a reversal and decline for the first leg, a retracement, a decline for the second leg, a retracement and finally the third leg decline.
While the projection targets for the continuation decline can be helpful, they should only be used as rough guidelines. Securities can overshoot their targets, but also fall short. Technical assessments should be ongoing.
MPR I like the way you think...What would even make it better is to get good numbers from JPM and WFC tomorrow and still sell off..That would weed out the remaining bulls and set up a possible bounce next week..I do not see a big down turn next week due to optons expirations and all the games that happens but after that watch out..
SPX features a wedge with an obvious upward channel playing out inside of it right now. We are also lodged between a POC and a value area nearly as large. I will naturally assume the channel holds as the wedge grows tighter and tighter. The stock world is still waiting on something to either breakout or break down. What either of those could be, I'm not really going to hassle myself with.
Morning sell off......eod rally...seems easy
I also see your WMT has broke out with a vengeance....nice
Edited by OldFart - 7/13/12 at 5:25am
I'm thinking we have room up to 1360 next week, only if we hold our gains today.
But I just bought some PCLN 605x puts for next week since it's looking pretty bearish. Not participating in today's rally at all.
As a day trader, I remember days in the past when I was completely biased to one side of the market and I would became insanely frustrated at what appeared to be "no opportunities." I've since made it an issue to work on my short/put game and I don't find myself thinking with that old mind set anymore. Only time I find there are no opportunities is when it's pure chop .... you have to be a high tech algo to even master that mess.
I just want to mention how ironic the last part of the statement is .... because AAPL's chop was an absolute bastard to me today. I don't even know how I found myself in it. I know from experience how they like the pin the price on Friday of a weekly OPEX. One of those trader "relapse" days.