Daily Form September 10, 2009

Detecting Profitable Patterns For Active Traders

Successful trading without having to be right about the underlying market direction

THURSDAY SEPTEMBER 10, 2009       07:01 ET

Exuberance for risk trades and dollar bashing are being tempered somewhat in European trading this morning - probably just a pause to refresh?
The chart below is a current 30 minute view of the S&P 500 futures and shows that there are signs of negative divergences and an Ichimoku sell signal about to be triggered.
Support should be expected at the bottom of the green cloud but that may or may not have come and gone by the time trading begins in New York in a couple of hours.
In general terms the mood remains buoyant with plenty of talk about the end of recession to keep those skeptics on the sidelines worried. As such they are likely to jump in on pullbacks and assist the process of programs which are also designed to squeeze impatient short sellers who remain steadfast in calling a top.
For the time being the dynamics are leading to some fairly quick reversals but the reward/risk ratio is, from my perspective, looking less interesting on the long side.

The Hang Seng Index (HSI) almost touched the 21,300 level referred to in this commentary frequently. The reversal which occurred later in the session has caused a shooting star to be formed at a significant juncture for the index.

One of my favorite cross rates to monitor at present is the AUD/JPY which is also showing signs of sinking through support levels on the hourly chart as this is being written.
This currency pair is one of the traditional "carry trade" pairs although as recently discussed the US dollar is increasingly becoming the short leg in carry pairs.
As I have annotated on the Ichimoku chart there is quite a void of support below current levels and the 77.50 level looks feasible in coming sessions.


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 a more comprehensive listing of price formations detected by our pattern recognition algorithms please visit TradeWithForm

DBA  PowerShares DB Agriculture  

The following comment was made a week ago in this commentary.

DBA, the sector fund which tracks agricultural commodities, broke below key technical indicators yesterday.

CENX  Century Aluminum Co.  

Century Aluminum (CENX) has a bear flag pattern.

TBSI  TBS International Limited  

Also another comment from a week ago

The chart for TBSI looks constructive from a long side perspective.

YRCW  YRC Worldwide Inc.  

The chart for YRCW, is also a follow up on a recent recommendation for the long side.
After following through with a definitive rise from the pink cloud following an Ichimoku signal crossover there is a level of chart resistance which needs to be confronted and if broken would exemplify the requirements of a CANSLIM breakout pattern.

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