Post feedBear Trap
Today does not change my opinion on the market in the least. In fact I hope this is not causing traders to close bearish positions. None of the bearish trades I am in have triggered my exit signals, so I just take a deep breath and realize that in order to get to tomorrow, I need to make it through today. Earlier in the week I mentioned there was the potential for the Dow to make an equivalent high at around 11200. Notice how todays action takes us right to this level. If the Dow breaks higher and closes there, then I might reconsider my posture. Here is a snapshot of the Dow.... 
We'll take another look as of the close today, but I still feel comfortable anticipating the retracement at the moment. The advance/declines today is also not in my favor, but by the close I bet it looks quite a bit better. RHAT is hesitating, and will likely hop in on Monday morning before the market crash. I found a few others to watch for puts...BRL, COH, and RTI. Beautiful downtrends, and almost right for the taking.
Joel,
I see the H&S pattern, but would be hesitant to enter a call on this stock only because a head and shoulders pattern is a reversal pattern that appears at the end of a trend. EWZ has been trending upwards for several years, so a bottom H&S wouldn't apply here.
I see the pattern as very similar to that of the $DJX and $SPX except that this most recent low was a higher low than the two indices managed to make.
I might be more inclined to consider EWZ as forming an ascending triangle continuation pattern. It has been making higher lows and still hitting it's head on solid resistance around $40. On Friday, it had a strong move up with volume, but was unable to break that $40 mark. I would say that it's next attempt might be more successful. Certainly would be one to keep on a watch list.
My indicators tell me this may need to retrace a bit before it continues up. Maybe only down to to $38?
Just my .02.
Posted by
Anonymous |
7/29/2006 07:36:00 AM