Daily Form February 28, 2008

Profit Patterns and Risk Management For Active Traders
Trade successfully without having to be right about the underlying market direction
THURSDAY FEBRUARY 28, 2008       05:34 ET

Despite a lot of attention being focused on the testimony of the Federal Reserve chairman before the House Financial Services Committee, which included a barely disguised promise to reduce short term rates by another 50 basis points, there was little consequential movement in equities.

The Dow Jones Utilities index (^DJU) looks slightly more prone to a breakout downwards from its recent congestion pattern than some of the other broad indices.

Movements in prices of the utilities and gold are typically negatively correlated owing to their different reaction to inflationary concerns. As the price of the precious metal makes historic highs and moves closer to the $1000 per ounce target, the gold and silver index (^XAU) made a marginally improved all time high in yesterday’s trading.

As discussed last week the Sao Paulo Bovespa index (^BVSP) is also on the verge of an all time high.


The patterns identified below should be considered as indicative of eventual price direction in forthcoming trading sessions. None of these setups should be seen as specifically opportune for the current trading session.
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Global Santa Fe (GSF) has negative momentum divergences that add emphasis to the rather bearish shooting star formation that was accompanied by very heavy volume.

AVID  Avid Technology Inc  

Avid Technology (AVID) has risen steadily in a channel since the early February sell-off but yesterday’s break above the 50 day was not accompanied by convincing volume.