Pain!

The "Other 1-2-3"

...also called the "exhaustion pattern", is differentiated from the classic trader Vic 2B pattern, but is an attempt at calling a top nonetheless.

Looks upward, but a bearish case could be made with some type of 1-2-3 "exhaustion" pattern, or what T.Lo calls the "other 1-2-3" since this does not follow the classic Trader Vic 2B pattern.

If this were the case, the short-sale would be entered here or at the LOD from yesterday (= 110.60) with yesterday's high (= 111.784) as the buy-stop. Of course, the risk is that we keep trying to call a top and keep getting stopped out and die the death of a thousand cuts.

It seems the "other 1-2-3" is really as much a sentiment call as a technical set-up.

EURUSD Rangebound

...with some bearish features. Above 1.50500, we could go much higher.

SPY: Where's the resistance?

Alright, Eric has pointed out that we have multiple levels of support, but where is the resistance?

1. Near term high (today) of 111.69
2. After that, we have 112 (the 50% retrace from Oct 07 highs to March lows).
3. Then we have the red bar high from Oct08, 2008: 119.34
4. Finally, the 61.8% Fib retrace: 122.41

SDS day trade [Updated]

Anatomy of a day trade. Big gap up today so looking for a short entry. Eric's pointer (from T.Lo) is to look for an inside bar on the 5-minute. Entered buy on SDS at 10:10 bar price 35.60.

Sell-stop is the previous bar low which is also low of day. Target is just below the biggest gap down bar or the 2-bar EMA, whichever comes first.

Sold half at 35.76 (below the 9:55am bar high) at 10:36am
Sold 1/4 at 35.85 (20-bar EMA) at 11:30am
Holding 1/4 for now.



--------------------------
Update 1700hrs 11/23

Sold remaining 1/4 near the close for $35.97

SPY and IWM

SPY 135-minute charts show the beginning of a downslope with the 5-bar ema below the 20-bar ema. On shorter time-frame a bear flag has been forming (Wave B), but the tendency is for the trend be established with this 5/20 bar cross on the 135-minute chart. Any intra-day spikes above the 20-bar ema would be shorting opportunities. Be careful with shorts if the 5-bar rises above the 20-bar ema. As Eric has said, Monday may see a spike as part of the end of a Wave B, but the Wave C should follow shortly. MACD is bearish with negative divergence which, while not as reliable, corroborates a weak chart.






Likewise, the IWM (135-minute) has the 5-bar below the 20-bar ema. This chart looks weaker, having already made a lower high. Transports have not confirmed the recent high in large caps. T.Lo has pointed out that in the last gasps of a bull-run, the safe large caps tend to get the last buyers, so this could be a sign of weakness in the market.





Other charts to consider would be the dollar and Vix, whcih are both forming bottoming patterns.

AMAG: Holy Grail short sale

AMAG pharmaceuticals is in a down trend and recently made a lower high, so I am looking for a short set-up on a day trade.




















On the 5-minute, we are looking for a strong tend as determined by an ADX > 25. The we wait for a retracement up to the 20-bar EMA for a short entry. Buy-stop is set at the resistance level as determined, in this case, by the top of the previous large red bar.

Target is above the low of day for a day-trade, but this one could go much lower on a mutlti-day time frame. (Disclosure: I'm short this stock from 41.01 and have cover 1/3 already.)