Daily Form February 27, 2009

CLIVE CORCORAN WILL BE A GUEST ANALYST ON CNBC's EUROPEAN CLOSING BELL TODAY

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FRIDAY FEBRUARY 27, 2009       06:14 ET

The patterns highlighted on the chart below for the S&P 500 Cash index (SPX) reveal that the market is resolving its internal conflicts, when it does so, to the downside and I expect this pattern to continue.

The GDP number today could be a market mover and I would still expect erratic intraday jockeying for positions to keep the near term direction unclear but I am now feeling more confident that we will be seeing a 6 as the first digit in the index value in the intermediate term.

For what it’s worth amongst my own most recent musings on market mayhem is a note that Tim Geithner is now walking a tightrope and, should there be any mis-steps, he will be walking the plank.


The UK government is trailblazing with a sweetheart deal to ring fence those much celebrated "toxic assets". Why is this relevant to the US Banking index (BKX) - I have been commenting for some time that - much as it is counter-intuitive - the banks may finally be putting in a sustainable bottom.

That’s the good news - the bad news is that they may have stopped going down - and they have gone down on an epic scale - and even though they may enjoy some nice quick bounces the ground they now have to try to recover is staggering.

And this is in a financial environment which could take many years, to put it optimistically, to see anything like the supportive conditions and growth potential that resembles those seen in the earlier years of this decade.

While I am no longer outright bearish on the banking sector I am becoming more concerned that the risk transference that has been heralded by the Asset Protection Scheme (or should that be Scam) announced in the UK yesterday and which may have some echoes in the moves being made for Citigroup (C)are negative for all issuers of Treasury paper.

Gilts in particular need to be watched for signs of a buyer’s strike and although the US government has even bigger fish to fry - the US Treasury market has the benefit that it is underpinned by the global reserve currency.

Not that I am seriously proposing this, but the nightmare meltdown scenario that just could evolve is a surging dollar, an even more bullish market in gold and other strategic commodities, and an outright buyer’s strike which affects the most indebted nations first and eventually hits US Treasuries.

That is a conceivable risk that must now be contemplated and not just dismissed as scare-mongering. Thinking the unthinkable has proven to be a better conceptual strategy over the last year than thinking that smart financial engineers had successfully provided a safety net under capital markets by distributing risk through structured products and securitizations.

TRADE OPPORTUNITIES/SETUPS FOR FRIDAY FEBRUARY 27, 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

JNK  SPDR Lehman High Yield Bond  

The high yield corporate bond market is struggling as I intimated earlier this week. Another perspective on this sector and one which is tradable via an ETF is the chart for JNK, which is based on a Lehman High Yield Bond index.

Movements in this sector could be a precursor to the next leg down in equities.



UUP  PowerShares DB US Dollar Index Bullish  

UUP, which allows a bullish trade on the US dollar against a collection of major currencies is in a clear buy channel. While resistance is to be expected at the top of the channel indicated, there is a good chance that global investors are becoming increasingly convinced that the US dollar is the world’s worst currency - apart from all of the rest.

Daily Form February 26, 2009

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THURSDAY FEBRUARY 26, 2009       07:00 ET

The S&P 500 proxy, SPY, sold off in the last hour of trading yesterday and leaves me sceptical about the follow-through prospects from Tuesday’s rally.

Clearly the 80 level will be a major hurdle.

Here’s a note from my personal blog

I do hope that I am not alone in still being shocked by the Royal Bank of Scotland announcements this morning.

What is most shocking is that so much complacency and large number fatigue is setting in, that even when Alistair Darling admitted during a radio interview that just RBS alone needs to have insurance on almost half a trillion dollars worth of troubled assets, the interviewer took that number in his stride and then went on to another fairly innocuous question for the Chancellor.




XLF has rallied back to an area of chart resistance. The space between the two lines drawn on the chart is effectively a no-man’s land following the recent gap and could prove to be a real test for those who are making the case that the financials are ready to mount a meaningful rally.

As I have noted recently there is one slightly counter-intuitive comfort in the technicals for the sector, which is the fact that the MACD momentum indicator is still pointing to a noticeable positive divergence.

The hourly chart for gold indicates how the technical condition broke down rather drastically this week.

For the precious metal bulls, the $900 level for spot gold and the $90 level on the exchange traded fund, GLD, are now critical.

I shall simply repeat my comment from yesterday and indicate that I have changed the wording as reflected in the italics

The decline in the Japanese yen is continuing, and, following the severe downward gap in FXY in yesterday’s session, the target that I talked about last week of 102 has now been achieved .

As a note to Daily Form readers, discussion of individual securities will no longer be a daily feature of the free version of this newsletter but will appear on a less frequent basis. Further details regarding this change will be forthcoming in a separate mailing to current subscribers.

Daily Form February 25, 2009

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WEDNESDAY FEBRUARY 25, 2009       03:37 ET

Following Monday’s break to a new multi-year low the S&P 500 (SPX) reversed most of the losses from Monday but also registered an inside day pattern.

It will be interesting to observe whether the rally can be further energized by President Obama’s speech to Congress last night but the lack of specificity on ways of resolving the banking problems will continue to weigh on sentiment. Difficult decisions need to be made about how to re-organize institutions that are proving to be massive black holes - AIG might just be the largest financial black hole ever- and no amount of oratory is going to ease the pain that has to be endured.

If the market can maintain some upward momentum there will be sellers looking to get short again at 805 and even more around 820.


The Nasdaq Composite (IXIC) also produced an inside day and as the annotations to the chart below suggest this index would face a real test at the 1500 level.

The exchange traded fund ACWI, is designed to track the MSCI All Countries World Index and once again it becomes clear just how closely the numerous global equity indices track each other. Even to the point that yet another inside day pattern was registered.

The decline in the Japanese yen is continuing, and, following the severe downward gap in FXY in yesterday’s session, the target that I talked about last week of 102 has almost been achieved.

While reducing the position size and taking some profit off the table at this stage would be advisable there still seems to be plenty of scope for even lower levels to be explored.

TRADE OPPORTUNITIES/SETUPS FOR WEDNESDAY FEBRUARY 25, 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

Daily Form February 24, 2009

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TUESDAY FEBRUARY 24, 2009       07:29 ET

The S&P 500 (SPX) closed at its lowest level for almost 12 years.

The long term monthly chart for this index covers a fifteen year period and suggests that technicians must struggle to find any obvious clues as to where the next level of support kicks in.

I showed the chart to a friend who knows nothing about technical analysis and the comment was that it looked like an obvious "M" pattern. Simple when you think about it.

Furthermore when you deal with monthly granularity patterns it becomes rather obtuse to try to identify any kind of complex wave count theory.

In hindsight, which is always 20/20, it seems abundantly clear now that the double top in late 2007 with the subsequent failure in the summer of 2008 to break back above the 20 month moving average (the blue line on the chart) was a major sell signal.


Even though it is hard to have anything positive to say about the KBW Banking Index (BKX) the case that I have made before shows that positive MACD divergences have survived the recent onslaught.

The DAX index in Germany has now clearly taken out its lows from last November as has the CAC40 Index in France, although the UK’s FTSE still has some distance to go. It is worth pointing out that the German index still remains substantially above its 2003 lows while the FTSE could more easily revisit its 2003 lows and that is what I am expecting.

Meanwhile the problems I have alluded to in Eastern Europe continue to worry the bankers of western Europe.

Commercial banks in Germany’s immediate neighbor Austria have lent almost $300 billion to Eastern Europe, which is more than 70% of Austrian GDP. It has been estimated that even a 10% write-down could bankrupt the Austrian financial system. Meanwhile policymakers within the EU struggle with concerns emanating from the most troublesome eurozone economies - now becoming known as the PIGS i.e. Portugal, Ireland, Greece and Spain.

I am becoming increasingly concerned that this could end in tears for the technocrats in Brussels.

The relationship between the Japanese yen and the US stock market is changing quite significantly. Whereas the yen has been seen as a safe haven play where investors have parked funds when US asset prices, especially stocks, are declining the inverse now seems to be happening as the yen is falling in sync with declining US stock prices.

This has been observed in an article today from Bloomberg

“The yen appears to be losing some of its safe-haven status,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker. “Japan’s economic and political situation is poor.”

The correlation between the dollar-yen and the Nikkei 225 was minus 0.89 since Feb. 16 when a report showed Japan’s economy shrank at an annual 12.7 percent pace in the last quarter, the most since the 1974 oil shock. The relationship was positive 0.86 in the 12 months to Feb. 16. A reading of 1 would mean the two moved in lockstep.

“The correlation has broken down, because the drivers are now changing,” Stannard said. “Dollar-yen in particular will continue to move quite sharply higher.”

Demand for the yen as a haven also declined after U.S. financial regulators said yesterday they will begin examinations this week to determine if banks have enough capital. Citigroup Inc. and Bank of America Corp. jumped on the announcement even as the S&P 500 closed at the lowest level in 12 years.

TRADE OPPORTUNITIES/SETUPS FOR TUESDAY FEBRUARY 24, 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

HYG  iShares High Yield Corporate Bond  

The chart for HYG, which tracks the high yield corporate bond market is looking vulnerable to a possible re-test of the lows seen last November and December as there seems to be no obvious signs of support since the break below two key moving averages over the last few sessions.

Daily Form February 23, 2009

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MONDAY FEBRUARY 23, 2009       06:53 ET

News regarding a further capital injection into Citigroup (C) that circulated late Sunday from an article in the Wall Street Journal appears to be providing some support in overseas markets.

The Hang Seng Index (HSI) in Hong Kong managed a three percent gain and most European markets are up between one and two percent in early trading on Monday morning. There has been no official acknowledgment of the exact nature of the Citigroup assistance and its effect on the capital structure but the number of $75 billion has surfaced.

In this writer’s view the capital being made available to this behemoth bank is quite mind boggling and shows an obstinate refusal to accept the obvious - this bank is insolvent and should be placed into some form of re-organization or nationalization or whatever other euphemism provides the necessary fig leaf.

The short term fate of the S&P 500 proxy, SPY, will hinge a lot on how the markets react to a more detailed specification of the assistance being provided to Citigroup and also how some of the other problematic banks, specifically Bank of America (BAC), see below, react to the developments.

In the longer term Friday’s action did not remove my concerns that the path of least resistance for US equities is still down.


I am struck by the similar configuration and contours between the charts of SPY above and the exchange traded fund, UDN, which provides an inverse tracker to a broadly based dollar index. There is definitely a counter cylical trend emerging where as risk aversion increases and equities sell off so the dollar rallies and vice versa.

The Euro is benefiting from this trade in Europe this morning but as mentioned here recently there are some fairly profound structural problems confronting European monetary union and the euro, and it is a currency which would drop suddenly as capital flight by sovereign wealth funds surfaces again.

One of the key exchange traded funds to watch today will be KBE which is a proxy for the KBW Banking Index. The suggestion from Friday’s afternoon trading, as is evident on the 15 minute chart below, is that a bullish flag pattern emerged before the end of Friday’s session.

The weekend developments may provide an immediate impetus to the pattern but there is still capacity for negative surprises as the market digests the full implications of the world’s best known bank slips further into a coma in its intensive care unit.

TRADE OPPORTUNITIES/SETUPS FOR MONDAY FEBRUARY 23, 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

C  Citigroup Inc.  

Citigroup (C) managed to see a minor bounce off its low on Friday afternoon but still closed below the $2.00 level.

It is hard to see how any kind of short term government rescue plan is going to significantly differ from that well scenario of re-arranging the deckchairs on the Titanic.



BAC  Bank of America Corporation  

The 15 minute chart for Bank of America (BAC) shows far more clearly a similar flag formation to that seen for KBE.



PENN  Penn National Gaming Inc  

Penn National Gaming (PENN) has a rather well formed bullish flag formation on its daily chart.

Daily Form February 20, 2009

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FRIDAY FEBRUARY 20, 2009       06:59 ET

The current market action is giving an even subtler dimension to the notion of a slow motion crash. The DJIA closed at its lowest level in more than six years and the financials continue to get pummelled but there seems to be a rather stoical and mild mannered response to it all.

Part of the reason has to do with the way in which the Dow Jones is calculated

The Dow is a price-weighted index where the higher the stock price, the more it affects the index’s value. As many financial companies have plunged in value, the Dow is littered with sub-$10 stocks that have little impact. Consider that Bank of America (BAC), Alcoa (AA), Citigroup (C), General Motors (GM), and General Electric (GE) have a combined weighting of 2.9%. If all five were to go bankrupt the U.S. economy would be devastated, yet the Dow would fall only 220 points.

The S&P 500, which is market cap weighted is not quite at multi-year lows but a rendezvous with 750 looks almost inevitable. If that breaks I suspect that we could be looking at 680 in a hurry.

Many learned analysts from a more fundamental perspective are making cases for 600 or thereabouts on the S&P 500 based on P/E ratios but the enigma at the moment is trying to make any kind of convincing case as to what the E part of the formula is going to be this year.


The action in the CBOE Volatility Index (VIX) suggests that traders are not overwhelmingly concerned about the precarious state of major indices and that a new possibly severe leg down may be just around the corner.

I would point to the fact that the volatility (Bollinger) bands on the index itself are constricting which suggests that we may be headed for a breakout move - and at this stage it is hard to believe that that would be pointing to lower volatility ahead.

The UK’s FTSE has dropped more than 2.5% so far in London trading and as the long term monthly chart suggests the lows from last fall as well as the lows seen in March 2003 seem to be back on the radar.

I am particularly pleased with the call I made some weeks ago on pending weakness for the Japanese yen. At the time there were the beginnings of a topping pattern in the technicals but all of the commentators were still insisting that the Japanese currency was part of the safe haven matrix. Meanwhile the habitual dollar bears were proseltyzing about the risks to the greenback and some were urging investors to seek out the relative safety of the yen.

It seems almost certain that the Japanese central bank is partly responsible for the drop as it tries to engineer a more favourable exchange rate for their exports.If that is so they will probably be targeting considerably lower levels.

The point marked by the arrow which coincides with the 200 EMA seems feasible in the intermediate term.

Daily Form February 19, 2009

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THURSDAY FEBRUARY 19, 2009       06:06 ET

The Dow Jones Industrials Average (DJIA) registered an almost perfectly formed doji star pattern with an open and close just a few ticks away from Tuesday’s close. Such a pattern can signify an inflection point especially in the neighborhood of a strategically significant level.

Beneath the surface in yesterday’s trading there was a marked deterioration in several sectors of the market. Of the 800 or so stocks that I actively monitor only ten moved up by five percent or more yesterday whereas 52 moved down by five percent or more. Utilities and transports continued their decline and there is precious little evidence that institutions are buying at the current levels.


I have not reviewed the Nasdaq Composite index (IXIC) for some time. The two areas highlighted in yellow on the chart reveal two attempts to break out to the upside from the pronounced triangular formation. Both efforts were short lived and we now confront a potential break down.

Far more than the charts for the S&P 500 and the DJIA the chart below suggests that a trading range dynamic is still in evidence for this index. Further weakness in the near term and a break below the 1440 level - the closing low on January 20th - would strengthen my opinion that the bullish camp are starting to lose heart at current levels.

PFF, which tracks the S&P Preferred Stock Index, provides an insight into the appetite which institutions have for the less visibly trade capital structure of the banks and other large corporations.

It is one of the barometers that I use periodically for assessing, at least at a fairly simple level, the risk aversion/speculation matrix.

The closing low yesterday exceeded the prior lows from October and November and this is another indication that the market is not being perceived as offering compelling opportunities to many large institutional investors.

TRADE OPPORTUNITIES/SETUPS FOR THURSDAY FEBRUARY 19, 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

PCY  PowerShares Emerging Mkts Sovereign Debt  

PCY, the sector fund which tracks Emerging Markets Sovereign Debt, slipped below key moving average support on a spike in volume.

Credit default swaps for many sovereign credits are widening and with the plight of the old Soviet bloc countries simmering away in the background this looks like a good sector to be short in coming sessions.



SNDK  SanDisk Corporation  

The pullback channel for Sandisk (SNDK) has stalled and the two consecutive tiny doji stars on modest volume could be pointing to a re-emergence of the downward pressure which surfaced at the beginning of February.



ISIL  Intersil Corporation  

Intersil (ISIL) has a constructive looking pattern on the long side.



KSS  Kohl's Corporation  

Kohl’s Corporation (KSS) has dropped below two key moving averages and, although another effort to pullback towards the $36 level is conceivable there is a clear pattern of topping out at the $38 level in place.



XPH  SPDR Pharmaceuticals ETF  

A surge in selling emerged yesterday, in conjunction with a technically weak pattern following the recent break below all three key moving averages, on the chart for XPH which is an exchange traded fund tracking the pharmaceuticals.

Daily Form February 18, 2009

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WEDNESDAY FEBRUARY 18, 2009       03:51 ET

The Dow Jones Industrials Average (DJIA) has returned to within a few points of the lowest levels registered during November. The actual close of 7552 was within a fraction of the November 20th close but the intraday low yesterday failed to pierce below 7400 as it did on November 21st.

One other interesting statistic is that the DJIA has fallen almost 10% since the day before President Obama’s inauguration.

The selling yesterday was propelled to a considerable extent by fears in the global markets about the fall-out of the possible defaults within Eastern Europe as mentioned here yesterday. The Austrian stock index which is most exposed to failing credits for former Soviet bloc states dropped by almost nine percent.

One alarming scenario which should be monitored carefully this week is for evidence that major global holders of the Euro currency - especially Asian and Middle Eastern governments and sovereign wealth funds - may begin to dump euros for dollars in a very large, systemically threatening manner.

Just another thing to add to all of those other causes for concern.


The SPY proxy shows a rather interesting candlestick formation - an inverted hammer - which, contrary to a true hammer, would suggest that buying support was found near the lows of the session. In fact the attempts to mount intraday rallies ran out of steam and the S&P 500 closed more or less at its lows for the session and below the pivotal 800 level on the cash index.

We may see a bounce effort and even some celebrations that the late 2008 levels have held but I would be very surprised to see us move on without a further aggressive attack on the 750 level on the cash index.

The Japanese yen continued its decline yesterday and the 104 level seems to be a feasible target. One of the more interesting things about yesterday’s session was that the yen is losing its bid despite the rather unusual circumstance where the dollar, long term Treasuries and gold all rallied as fear returned to global capital markets.

As I suggested here last week the utilities sector fund XLU, seemed vulnerable after breaking below a key moving average level and a key trendline. The Dow Jones Utilities was one of the worst performing indices yesterday with a 4.8% drop and underlines the fact that even traditional defensive plays are not working in a market which is lacking normal liqudity and the usual participation of institutional fund managers.

Daily Form February 17, 2009

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TUESDAY FEBRUARY 17, 2009       05:51 ET

My inclination at this stage with respect to the S&P 500 (SPX) is that on balance, even though I believe that the 850 level needs to be tested again soon, many traders will be motivated to probe further to the downside and see if the 800 level will hold.

Action in overseas markets since the conclusion of trading in New York on Friday has been broadly negative and the economic news, including horrendous GDP numbers from Japan is showing that even with the widespread, gloomy view of the global economy there is still the capacity for nasty surprises of a negative nature.


The Euro is beginning to crumble in trading on Tuesday. After drifting during most of last week there is a continuation of the bearish downward staircase pattern to which I alluded last week.

There was an alarming article in the Daily Telegraph on February 15, 2009 by Ambrose Evans Pritchard. For those not familiar with the journalist he does have a rather apocalyptic view of world events and was for many years based in the US and a ferocious critic of the Clinton Administration and accused the Clintons of all kinds of malfeasance.

Over the last several years he has been an astute reporter on the global financial crisis but is not someone who could ever be accused of understatement.

Here is an excerpt from his piece

If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Götterdämmerung.

Austria’s finance minister Josef Pröll made frantic efforts last week to put together a €150bn rescue for the ex-Soviet bloc. Well he might. His banks have lent €230bn to the region, equal to 70pc of Austria’s GDP.

"A failure rate of 10pc would lead to the collapse of the Austrian financial sector," reported Der Standard in Vienna. Unfortunately, that is about to happen.

The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10pc and may reach 20pc. The Vienna press said Bank Austria and its Italian owner Unicredit face a "monetary Stalingrad" in the East.

Mr Pröll tried to drum up support for his rescue package from EU finance ministers in Brussels last week. The idea was scotched by Germany’s Peer Steinbrück. Not our problem, he said. We’ll see about that.

Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay – or roll over – $400bn this year, equal to a third of the region’s GDP. Good luck. The credit window has slammed shut.

Not even Russia can easily cover the $500bn dollar debts of its oligarchs while oil remains near $33 a barrel. The budget is based on Urals crude at $95. Russia has bled 36pc of its foreign reserves since August defending the rouble.

"This is the largest run on a currency in history," said Mr Jen.

The article is worth reviewing and, even if, just part of what he claims is about to unfold in Eastern Europe and Russia, does take place, this would create massive problems for the Eurozone economies and the ECB with knock on implications for the global financial system.



The Hang Seng Index (HSI) dropped by almost four percent in Tuesday’s session and this was closely matched by a similar fall in Shanghai. As suggested here recently there are bullish indications emerging from the Shanghai Exchange (SSEC) and undoubtedly there are institutional traders that will see pullbacks in this geographical sector as buying opportunities.

The Mumbai Exchange (^BSESN) indicates that not all emerging markets should be embraced with enthusiasm by those with a more adventurous approach to global equities.

TRADE OPPORTUNITIES/SETUPS FOR TUESDAY FEBRUARY 17, 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

FXY  Currency Shares Japanese Yen  

I remain bearish on the Japanese yen and the chart for FXY shows that critical trend lines are being violated.



TJX  The TJX Companies Inc.  

TJX, mentioned here last week in regard to a mini bull flag formation, still looks favorable on the long side.



TAP  Molson Coors Brewing Company  

Although it makes good beer Molson Coors Breweries (TAP) looks to be setting up for a further leg down in coming sessions.



HGSI  Human Genome Sciences  

Volume characteristics are supportive of a further move up by Human Genome Sciences (HGSI).

Daily Form February 13, 2009

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FRIDAY FEBRUARY 13, 2009       06:41 ET

Reviewing the hourly chart for SPY there is a clear suggestion that bulls were waiting to pull the trigger as the index came down towards the January 20th lows. The fact that the volume kicked in before there was a real testing of that low suggests that a trading range mindset is prevailing at present, rather than a concerted effort to properly test the possibilities of a new overall leg down.

Contrary to some people’s intuition I suspect that the reluctance to aggressively probe for evidence of game changing buying support at lower lows at this stage is actually an overall negative in the longer term outlook for US equities.


The hourly chart for the XLF sector fund is revealing even more the fact that there is a reluctance to stridently confront the upper and lower boundaries of the recent range. This is evidenced by the triangular pattern which simply postpones the inevitable resolution that must come.

I have for some time maintained that the financials will have to show some really convincing evidence that the worst is behind the sector before the tone for the general market can show any kind of sustained trending behavior. At present the dithering in the financials suggests that a trading range is the presumed outlook for the broad market in coming sessions.

The sector fund GLD posted a rather tiny range star pattern and there is evidence from the RSI indicator that the momentum, in the short term, may have been spent to gain the ground that has been seen this week.

Longer term the probability of another shot at the $1000 per ounce level has now increased and should we see a high momentum breakthrough on the third attempt, when it comes, this would be very bullish for the precious metal.

The way that the chart pattern is unfolding for the ETF which tracks the Japanese yen, FXY, is still suggesting that further weakness lies ahead.

TRADE OPPORTUNITIES/SETUPS FOR FRIDAY FEBRUARY 13, 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

TZOO  Travelzoo Inc.  

Yesterday’s comment regarding Travelzoo (TZOO) was very timely

There is a pullback pattern which resembles a bull flag and there is a likelihood of support at the 20 day EMA around $4.85

Buying at the level stipulated would have returned twelve percent on the session.



FISV  Fiserv Inc.  

Fiserv (FISV) has a bullish flag pattern.



ACH  Aluminum Corp. of China Ltd.  

I would target another attempt to move back towards $16 for Aluminum Corp. of China Ltd (ACH).



LAZ  Lazard Freres  

Lazard Freres (LAZ) also has a constructively bullish tone.



TBT  Ultra Short Lehman 20 Plus ProShares  

TBT, a sector fund entitled the Ultra Short Lehman 20 Plus ProShares, has reached back down to an area of moving average support where playing the long side would benefit from an uptick in the yields on long term US Treasuries.