Daily Form April 30, 2009

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THURSDAY APRIL 30, 2009       07:17 ET

The long standing 875 target which I have been talking about for several weeks was more or less achieved on the S&P 500 (SPX).

Is the next stop 935 or 850?

Given the current manic enthusiasm for equities where all news is being interpreted positively the odds favor a rally continuation. However a period of consolidation would be more constructive.

My discussion yesterday about the 30 year T Bond yield proved timely as the long end of the yield spectrum saw some big upward moves with the 10 Year Note moving up to close with a 3.1% yield and the 30 Year Bond moving above 4% for the first time since last November. In general terms what is becoming disconcertingly clear (from a budget financing perspective) is a fading appetite for US government securities amidst the massive supply and the re-allocation decisions being made by fund managers as they venture away from their safe harbor holdings of the last few months.


The Nasdaq Composite (IXIC) has moved decisively above the January 6th high and the 62% retracement level on the grid indicated on the chart. The next upside target would be the November 4th closing high level of 1780.

The ETF which tracks the US Dollar against a basket of currencies, UUP, is losing contention with the green cloud on the Ichimoku chart.

A bearish play on the dollar is available via the inverse exchange traded fund UDN.

TRADE OPPORTUNITIES/SETUPS FOR THURSDAY APRIL 30, 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

TLT  iShares Lehman 20+ Year Treas Bond  

I shall repeat my comments from yesterday regarding the concerns at the long end of the Treasury complex.

TLT, tracks the longest maturity Treasury bond prices, and as the ETF chart which tracks the price of 20 year plus instruments indicates this is where the most weakness is being felt in the sector.

For non-specialists in fixed-income mathematics (which includes myself) who do not have access to a more sophisticated modeling tool, Excel has a simple function to assess what would happen to prices in the secondary market for a 30 year bond with a current coupon on it, if the yield to maturity has to rise to reflect weak demand, high inflation or increasing skepticism that there is the political will to ever pay off the public sector debt - or, as could be the case, all three of those taken together.

Details of how to use this function to calculate what the secondary market value for a 30 year Treasury issued soon with a 4% coupon but which had to effectively yield (say) 8% to maturity can be found

here at my blog site.



YUM  Yum! Brands Inc  

Yum Brands (YUM) has a bullish flag pattern and could be headed towards the $38 level.



TLAB  Tellabs Inc.  

Tellabs Inc (TLAB) has an inside day pattern following a heavy volume doji star and the MACD chart suggests a waning of momentum. This would be worth monitoring for an entry on the short side.



CRL  Charles River Laboratories  

Charles River Laboratories (CRL) has a bearish pullback pattern which is facing overhead resistance from two key moving averages.



JRJC  China Finance Online Co. Ltd.  

China Finance Online (JRJC) has a positive pullback formation with bullish volume characteristics.

Daily Form April 29, 2009

Detecting Profitable Patterns For Active Traders
Trade successfully without having to be right about the underlying market direction
WEDNESDAY APRIL 29, 2009       03:19 ET

The doji star formation on the chart for the S&P 500 (SPX) indicates a market which is tentatively searching for directional cues.

On the one hand the fact that traders seem to be able to digest a lot of worrying news - about the possibility of a flu pandemic (although at this stage there are some signs that the disease may not be as virulent as originally thought - but only time will tell) to the realization that Citigroup (C) and Bank of America (BAC) will require additional capital which, it appears, will not be provided from the public sector TARP which is now running low of funds.

The pattern on the chart suggests that a bearish flag channel is evolving with clear resistance still at the 875 level. I still expect the 935 level from early January to be a likely intermediate term target and it is more than conceivable that the market could surprise with a break through resistance to confound those who are sensing that a retrenchment is imminent.


The Nasdaq 100 (NDX) appears to be stalling at a chart level where resistance is to be expected with candlestick patterns that could be signalling a potential inflection point.

Supply is weighing on the Treasury market and yields across the spectrum moved up yesterday. This was especially noteworthy at the long end of the yield curve as the 30 year bond yield moved up to levels not seen since last November.

Closing with a yield just below 4% the chart shows that a large gap from November 19th could be in the process of being filled and a move back above the four percent threshold will add concerns to the Fed and US Treasury about their continued ability to navigate their way through the massive re-funding operations that are now required to fund the deficit and structural US public debt.

Monitoring the action in the Treasury complex will be at the top of my agenda in the next few sessions as further evidence of deficient demand for coupons with a three handle will be a worrying development for the policy mentors - especially Larry Summers appears to be the most optimistic of steering the recovery through a benign interest rate environment.

One of the reasons why I have begun to show Ichimoku charts in this column (I have been following them for some time in my own work) is that they convey quite clearly the critical price zones for an asset.

The euro is still within the green cloud which suggests that while the chart has technically negative characteristics, it would only be a decisive drop out of the green cloud that would confirm a longer term bearish phase ahead for the European currency.

At present the $1.30 cross rate with the dollar seems to be a strong attractor and asset allocators seem not to be anxious to reveal any great desire to challenge this "comfort zone".

TRADE OPPORTUNITIES/SETUPS FOR WEDNESDAY APRIL 29, 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

TLT  iShares Lehman 20+ Year Treas Bond  

TLT, tracks the longest maturity Treasury bond prices, and as the ETF chart which tracks the price of 20 year plus instruments indicates this is where the most weakness is being felt in the sector.

There is an inverse version, TBT, available for those who want to exploit this weakness in yields but it does have two to one leverage and its technical pattern is not quite so compelling as the one for the actual prices of longer dated US government debt.



IEF  iShares Lehman 7-10 Year Treasury  

IEF, tracks the 7-10 year Treasury curve, and as can be seen in comparison to the TLT chart the pattern is not yet indicating a break down but a drop below the base line to the descending wedge, which more or less corresponds to a clear break away from the three percent yield on the 10 year note, could also be a harbinger of looming problems for Treasury auctions.

Daily Form April 28, 2009

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TUESDAY APRIL 28, 2009       07:16 ET

Markets appear to be gripped by growing anxieties about the possibility of a flu pandemic with all of the accompanying negative consequences on an already vulnerable global economy.

As this is being written key European markets are down by about three percent and the Nikkei in Japan suffered a 2.7% decline along with falls in other Asian markets.

The chart for the S&P 500 (SPX) reveals a rather intriguing pattern where the candlestick registered in Monday’s session was an inside pattern - all of the price action was confined within the range of Friday’s session. As can be seen on the chart this coincides with a key potential chart resistance level and, given the disconcerting news flow, there is additional plausibility that we may be headed back towards a re-test of levels in the neighborhood of 835 again.


Chart for The Nikkei 225 (N225) and the DAX in Germany shows that the leading export based economies would perhaps be most immediately affected if the flu pandemic causes further consumer retrenchment this can only augment fears that any recovery in business momentum could have even more adversity to contend with.

The chart for the Nikkei is not looking at all constructive at present with a break down from the uptrend clearly visible and should the index fail to find support at the 8400 level this could trigger a rather abrupt drop to lower levels last seen in March.

The DAX has retreated by almost three percent in trading in Europe on Tuesday morning.

The chart pattern reveals that the index struggled to remain above the 62% retracement level, using the fibonacci grid and levels that I have been outlining for some time, and that there now seems to be a probable return towards the 50% retracement level on the fibonacci grid and perhaps to another test of the 50 day EMA at 4350.

Daily Form April 27, 2009

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MONDAY APRIL 27, 2009       07:01 ET

Following Friday’s action the rally is starting to look quite over-extended and the Nasdaq 100 (NDX) has reached up towards a level at which bearish index traders should be expected to mount a challenge.

As can be seen in terms of the fibonacci grid the index is racing ahead of its rivals in the US having easily surpassed the 62% retracement level for the 1470/1025 grid that I have been using for some time.

There seems to be mounting evidence that the worst of the economic downturn may be behind us, although there is definitely a case of that perennially upbeat analyst Rosy Scenario making a re-appearance, but there are still real doubts about the strength of the recovery. For me the strong "V" shape makes me less confident that the bulls will be able to keep injecting new momentum into the recovery story in the near term.


The euro has a distinctive descending wedge pattern through the highs since mid March and its inability to hold on to Friday’s gains raises again the bearish implications of falling below the green cloud on the Ichimoku chart.

The Hang Seng Index in Hong Kong has encountered the strong resistance as it approached the 16000 level as anticipated here recently. The index slumped back towards the 20 day EMA but could see further erosion back towards the 50 day EMA level in the vicinity of 14200.

This would also have the consequence of violating he very strong upward trendline from the March low which is helping to contribute to the rather disconcerting V shape that has emerged on the chart.

The yield on the ten year US Treasury note closed at exactly 3% on Friday and as I mentioned in Thursday’s column one of the warning signals that I believe will be worth monitoring in coming sessions is whether this yield can retreat following some more signals from the Fed that QE is alive and well or whether the global competition for capital, with investors less risk averse now than they were just a couple of months ago, is likely to raise concerns about the vast quantities of sovereign paper that will be issued this year.

On this topic the following story from AP shows that the IMF is now joining the queue to sell bonds to raise the money that was "pledged" at the meeting at the beginning of April in London.

WASHINGTON (AP) -- The International Monetary Fund will sell bonds as a way to raise funds to lend to struggling nations, the head of the organization said Saturday, in a victory for developing countries.

Emerging economies such as China, Brazil and India pushed for the move as an alternative to providing longer-term loans to the IMF. Those countries want a greater voice in the institution before providing additional resources.

IMF Managing Director Dominique Strauss-Kahn said China and other countries have expressed interest in purchasing the bonds. The IMF has never issued bonds before, although the idea was explored in the 1980s.

The move, announced after the IMF’s annual spring meeting, indicates the world’s leading economies are having difficulty following through on a pledge made in London April 2 to boost an IMF emergency lending facility by $500 billion. The bonds will contribute toward that goal but will provide shorter-term financing than the loans that Japan, the European Union and the United States have promised.

The final paragraph makes clear that one of the alleged positive contributions that arose from the G20 gathering was actually little more than a catchy headline where all of the heavy lifting still has to be done.

TRADE OPPORTUNITIES/SETUPS FOR MONDAY APRIL 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

GDX  Market Vectors Gold Miners ETF  

GDX, which provides exposure to the gold mining stocks via an exchange traded fund has registered a rather remarkable chart pattern which has morphed from what was clearly evolving as a bear flag formation during the earlier part of last week into a far more positive pattern with increasing volume as the price moved up by almost six percent in Friday’s session and in so doing has moved ahead of key moving averages - including the green line which is the 50 day simple moving average.

Needless to say the picture for the precious metals is itself somewhat confused at the moment and I shall be watching gold and silver this week for further signs that they may be ready to reverse significantly from their recent drift downwards. The potential for an upwards breakout for gold especially remains high.



XLE  SPDR Energy Sector  

I drew attention the energy sector fund XLE, about a week ago, and once again it is showing further evidence of wanting to move away from the pink cloud on the Ichimoku chart. There is no need to be stepping out with any urgency on the energy stocks as there is still plenty of scope for setbacks, but as the sector rotation strategies being followed by many quant based hedge funds continue to ripple through the market, this is one sector where an upward surprise could appear at short notice.

Daily Form April 23, 2009


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THURSDAY APRIL 23, 2009       06:42 ET

The shooting star pattern on the chart for the Nasdaq Composite (IXIC) reveals a formidable hurdle being faced by the broad, primarily non-financial equities market at the January high. As discussed yesterday the top 100 stocks in this composite index by market capitalization are continuing to outshine but the breadth divergence is some cause for concern.

As drawn on the chart the very steep trendline up from the early March low has already technically been crossed and if we were to see another violation in coming sessions this would underline the concern I have that the upward momentum bias which has been in evidence for the last six weeks is running out of stream.

Certainly the intraday price behavior was sloppy yesterday and there is still a lot of spinning come from the US Treasury about the state of the banks.


The UK government presented its annual budget to Parliament yesterday and confirmed the dire state of the public finances. For those interested in a personal reflection on the budget (not a detailed summary but more impressionistic) there is the following piece at my blog site.

There is a growing sense in the UK now that the tide has turned politically and the current Labor government will be replaced at the next election which has to be held within one year.

Looking at the FTSE from an Ichimoku perspective it is still of concern that the index has been unable to break free from the pink cloud on the chart unlike many other global indices.

Yields on the ten year US Treasury note have risen almost all the way back to the three percent level which they were at prior to the Fed’s announcements about quantitative easing. Some are even questioning how much the Fed is even committed to its announced targets of purchasing Treasuries, but one would suspect that the folks at PIMCO would be getting rather antsy if yields kept moving northwards of 3%.

Chairman Bernanke and Mr. Geithner cannot affored to annoy Bill Gross and his chums so perhaps we should expect some new announcement relating to QE and a retreat on yields.

TRADE OPPORTUNITIES/SETUPS FOR THURSDAY APRIL 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

PPH  Pharmaceutical HOLDRS  

Yesterday I drew attention to a bearish technical picture for XLV an ETF which tracks Health Care stocks and today I thought it worth showing an even more bearish perspective on PPH which tracks the pharmaceuticals.



FXB  Currency Shares British Pound  

As I discussed earlier this week the chart for FXB revealed how the British pound failed at the $1.50 level and headed down to the $1.45 level as anticipated.

Stepping back on the longer term view what is remarkable about the Ichimoku view on the currency is bearishness of this currency’s direction as reflected in the complete failure for months to move above the pink cloud.

The UK could be headed for help from the IMF although the government would strenuously deny this - in such a circumstance the cross rate to the dollar and the euro could have a lot further to fall.

This may be of more interest to UK readers as there was a lot of discussion in the post budget debate yesterday as to how the Chancellor came up with his incredibly optimistic forecast of 3.5% annual growth from 2011. Was it the result of sophisticated scenario analysis on the UK Treasury’s high powered computers?

Well perhaps not.

Chancellor Darling mentioned, in interviews today, that his expectation is that the world economy will double in the next 20 years - just where he comes up with that number was not explained.

However if you quickly run the following on your calculator or Excel 1.035^20 it comes out as close to the desired 2 or doubling as you could hope for.

Probably just a coincidence.



SLV  iShares Silver Trust  

The chart for SLV, which is the exchange traded fund for silver, shows a bearish flag developing as price slips under the green cloud. Given also the bearish volume patterns it would be worth looking for entry points on the short side in today’s session.

Daily Form April 22, 2009

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WEDNESDAY APRIL 22, 2009       02:44 ET

There was no follow through to Monday’s sell-off and the balance of probabilities still favor the bullish case as revealed in the underlying chart patterns.

The Nasdaq 100 index (NDX) is showing the most relative strength and, having surpassed the early January highs a few sessions back and now faces a renewed challenge as to consolidate its position above a 62% retracement threshold (based upon the grid approach I have been using recently with high/low values of 1470 and 1025)

If the index is able to re-challenge the recent high of 1362 there is another key upside target from last November at 1382. Risks to the downside would suggest that 1250 would provide strong support as it coincides with the 50 day EMA and the 50% retracement level within the fibonacci grid.


European indices came under pressure during late morning trading yesterday in Europe. The DAX index in Germany came down and tested 4390 which was almost exactly the level discussed here in Monday’s letter and the FTSE in the UK also tested a key level near to 3900.

The UK government will be presenting its annual budget today in Parliament and all attention will be focused on the PSBR (Public Sector Borrowing Requirement) which could be as high as £180 billion which would be the largest deficit as a percentage to GDP other than during wartime.

Much of this will have been baked in to UK equities but there is a capacity for surprises and as the Ichimoku view reveals this index is at a pivotal juncture.

KBE, is the exchange traded fund which tracks the KBW Banking Index (BKX) and the reversal yesterday shows how the sector managed to bounce back from falling into the pink cloud.

TRADE OPPORTUNITIES/SETUPS FOR WEDNESDAY APRIL 22, 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

XLV  Health Care Select Sector SPDR  

There was further evidence that the defensive sectors are being pushed aside as the overall risk appetite for equities remains lively. Reviewing the technical condition for XLV, the Health Care Select Sector SPDR, the formation suggests that the sector looks likely to be an under-performer.



RWR  DJ Wilshire REIT ETF  

RWR, an exchange traded fund which tracks the total return performance of the Wilshire REIT index, shows a strong reversal candlestick on very substantial volume which eradicated the losses from Monday’s session. Despite the lamentable fundamentals in commercial real estate the price action is suggesting that traders are already seeing those apocryphal green shoots on the horizon.

Daily Form April 21, 2009

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TUESDAY APRIL 21, 2009       06:25 ET

As suggested in yesterday’s comments the S&P 500 (SPX), having achieved a critical target of 875 during Friday’s session proved vulnerable to a bout of selling which was anticipated by some dislocations within the currency markets in Asian and European trading before the US session opened yesterday.

The characteristics of the "deflation trade" were in evidence yesterday with a stronger dollar, stronger Treasuries, weaker equities and a decline in commodity related and early cyclicals equities.

On the downside there are two levels to pay attention to - 815 is the approximate 50 day EMA and 795 is the 38% retracement level from the application of the 1000/666 grid whichI have previously discussed.


The Hang Seng Index (HSI) dropped 3% in Tuesday’s session but still remains within a remarkably steep buy channel.

KBE, is the exchange traded fund which tracks the KBW Banking Index (BKX) and as can be seen the volume has been substantial during the recent decline.

The action over the next few sessions will be vital for this sector as a drop below the 50 day EMA at $15 and re-entry from above into the pink cloud on the Ichimoku chart would raise a question again about whether doubts could be mounting again regarding the solvency of some of the largest banks.

When stocks like Citigroup (C) and Bank of America (BAC) drop more than 20% in a single session, notwithstanding their remarkable recent rallies, it underlines how sentiment towards the banking sector is still fragile.

TRADE OPPORTUNITIES/SETUPS FOR TUESDAY APRIL 21, 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

KOL  Market Vectors Coal ETF  

As suggested in last Friday’s commentary, KOL, which is an exchange traded fund which tracks U.S. and foreign companies principally engaged in the coal industry, was revealing a topping pattern as it approached the early January high.



BIK  SPDR S and P BRIC 40  

A similar comment to the one above for KOL was made last Friday for an exchange traded funds which tracks the BRIC emerging market sector, BIK,

The pattern had a shooting star pattern where the intraday high touched the 200 day EMA and met price rejection and selling Friday’s open would have produced a two day return in excess of six percent.



PEP  PepsiCo Inc.  

Pepsi (PEP) dropped decisively below two key moving averages on substantial volume.



COF  Capital One Financial Corp.  

Capital One Financial, COF, shares the same pattern as Pepsi with a drop below two moving averages and a violation of a trend line.

Daily Form April 20, 2009

Detecting Profitable Patterns For Active Traders
Trade successfully without having to be right about the underlying market direction
MONDAY APRIL 20, 2009       06:24 ET

The S&P 500 (SPX) reached up and registered an intraday high just above the 875 target (the 62% retracement level) which was identified here several weeks ago.

Having risen decisively above the pink cloud on the Ichimoku chart the odds favor the bullish case with a possible test of the 935 level seen in early January as a feasible target. Weakness in Europe and some significant failures in the currency market by sterling and the euro along with some other indicators from the very low yields on 30 day T-bills could however be pointing to some short term dislocations. Also with earnings season now in full force this would be a good time to move to the sidelines with a view to stalking short positions on the broad market if signs of a tradeable pullback emerge.


In European trading on Monday morning the euro has dropped below the $1.30 on its cross rate with the US Dollar and perhaps more ominously it is now losing contention with the green cloud on the chart below, which, if validated in the next couple of sessions, would suggest a re-visit to the $1.25 area.

The Dax Index, after having risen above a key retracement level on Friday has retreated by 2.5% as this is being written and a pullback to the 4380 level now seems likely.

Reviewing many of the sector funds over the weekend one of the Ichimoku patterns which is well formed and caught my attention is for XLE, which tracks a variety of energy companies and assets.

Point A indicated on the chart illustrates a failure in early January to emerge from the pink cloud, point B confirms the break down which culminated in the early March low and as can be seen the point C on the right hand side of the chart is the most bullish indication on the chart as price is emerging from the pink cloud. One would like to see a couple more closes above the pink cloud in coming sessions which would provide a good buy signal for the sector.

TRADE OPPORTUNITIES/SETUPS FOR MONDAY APRIL 20, 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

FXB  Currency Shares British Pound  

As the chart for FXB reveals the British pound failed at the $1.50 level and would now appear to be headed in short order back to the $1.45 level.



INP  iPath MSCI India Index  

The exchange traded fund which tracks the MSCI India Index, INP, is at threshold of a zone which may present very short term resistance and almost certainly will present more substantial resistance if the first hurdle is crossed.

The risk/reward matrix within the price zone indicated on the chart in unfavorable and would keep me on the sidelines of this emerging market in the near term but with a bias towards a re-entry on the long side longer term.

Daily Form April 17, 2009

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FRIDAY APRIL 17, 2009       05:20 ET

The S&P 500 (SPX) is just ten points shy of the 875 target (the 62% retracement level) which was identified here several weeks ago.

The next few sessions should make clearer whether we will get a period of consolidation at this level before another target comes into play - the 935 level from early January - or whether there could be some new vigor from bearish index traders to challenge the attainment of the key retracement level.

This piece on price deflation (according to official statistics at least) caught my eye yesterday:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in March, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The index has decreased 0.4 percent over the last year, the first 12 month decline since August 1955




As anticipated in yesterday’s column the Gold and Silver index (XAU) was ripe for corrective action in the context of a bearish flag formation. The index dropped by five percent on the session.

The Ichimoku chart reveals that the index has not yet dropped below the green cloud, which would be a significant bearish development, but the precious metals sector is at a critical juncture as is the price of gold itself.



Unlike many of the key global stock indices the FTSE has still not emerged above the pink cloud on the Ichimoku chart which would provide further evidence of bullish price action ahead.

As can be seen the level for the index to move above the pink cloud is 4068 which also is exactly the 50% retracement level of the fibonacci grid that I have been super-imposing on this chart in recent commentaries.

The 4200 level would be the 62% retracement level for the FTSE as the 875 level is for the S&P 500.

TRADE OPPORTUNITIES/SETUPS FOR FRIDAY APRIL 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

KOL  Market Vectors Coal ETF  

KOL is an exchange traded fund which tracks U.S. and foreign companies principally engaged in the coal industry. The chart reveals long upper tails in recent sessions as price has moved towards the levels seen in early January.

The shooting star pattern observed yesterday with an intraday high of $17.42 suggests that another attempt to reach back to the $17.62 level seen on January 6th could prove to be a good entry point on the short side.



HOG  Harley-Davidson Inc.  

Harley Davidson (HOG) appears to be running into serious resistance just below the 2009 high level and the striking shooting star pattern would keep this chart on my Watch List for the short side in coming sessions.



BIK  SPDR S and P BRIC 40  

One of the exchange traded funds which tracks the BRIC emerging market sector, BIK, has another shooting star pattern where the intrday high touched the 200 day EMA and met price rejection.