Daily Form January 28, 2009

Detecting Profitable Patterns For Active Traders
Trade successfully without having to be right about the underlying market direction
WEDNESDAY JANUARY 28, 2009       05:53 ET

The hourly QQQQ chart reveals a bullish ascending wedge pattern but also points to two resistance barriers that now need to be confronted.

The more significant perhaps is the 200 hour EMA at $29.50 which more or less coincides with yesterday’s close but also there is potential for considerable overhead supply as the Nasdaq 100 tracking stock approaches $30.

I am leaning more towards the long side at present but would expect some continuing turbulence in coming sessions.


I shall not make any rash predictions about the technical state of the banking sector but I will merely point out that the KBW Banking Index (^BKX) is revealing evidence that a basing price and MACD pattern may be evolving.

Even more noteworthy, if the patterns are confirmed in coming sessions, is the fact that in this instance the MACD would not have moved to a new low in terms of its emerging base. This would be in contrast to when the MACD confirmed, from a momentum perspective, the price low achieved back in November.

And now for something completely different - a short posting from my blog site .

INCREASED AVALANCHE RISK IN DAVOS

Top bankers should not have forgotten during the 2003-6 boom years that it always has been, and always should be, in their best long term interest to be even more focused on PR than Hollywood - after all they have bigger illusions to protect than those in LaLa Land,

Evidence is emerging that the "Masters of the Universe" are listening closely again to their public relations handlers as it has been announced, in the last day or so, that the leading lights from Barclays, Citigroup and Goldman Sachs are all staying away from Davos in 2009.

Not surprisingly this year’s World Economic Forum in the Swiss mountains will be primarily attended by politicians, presumably being advised by their spin doctors that it is good for politicians to look very busy during these very troublesome economic times.

Anyone planning to go ski-ing in the Davos locality over the next few days should be extra vigilant as there is an increased likelihood of avalanches as a result of all of the hot air emanating from the conference.

I shall be tracking the sector fund, HYG, a tradable vehicle for those interested in the high yield debt sector. The pullback could be near to completion and another move towards $80 is feasible.

TRADE OPPORTUNITIES/SETUPS FOR WEDNESDAY JANUARY 28, 2009



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.
For full details on time horizons, risk management and hedging techniques please visit http://www.tradewithform.com

DOX  Amdocs Limited  

Amdocs (DOX) could be attractive on the short side in the region of $19.

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