Daily Form March 30, 2009

Detecting Profitable Patterns For Active Traders
Trade successfully without having to be right about the underlying market direction
MONDAY MARCH 30, 2009       05:58 ET

The S&P 500 failed to make any progress above the 833 level discussed here in Friday’s column and I suspect that the next target which almost certainly will be tested in today’s session is the 791 level which was the intraday low from March 25th.

There is potential in today’s session for violation of the upward trendline through the lows and that would be validated if the 780 level fails to lend support. A close below that level today could lead to an abrupt sell-off during the course of this week ahead of the G20 meeting and the employment data due this Friday.

The economic news in Japan seems to be surprising even the most pessimistic forecasters and the weekend news regarding GM and the auto sector in the US has taken the spring out of the recent bounce for the Nikkei 222 (N225).

The 8000 level sees the intersection of two key moving averages and should provide some support in the intermediate term.

The Hang Seng Index (HSI) in Hong Kong gave back five percent of its recent gains and seems destined to test the 13200 level which sees a coincidence of two moving averages.

The Euro is sliding again and, since the $1.32 level has been penetrated already during early trading in Europe the odds favor a re-test of the $1.30 in the near term.

According to a report from Bloomberg one major prop that has given the euro a boost recently has been removed. The downside now looks like a fairly safe bet - perhaps all the way back to the $1.25 level soon.

Citigroup Inc. said it ended a bet that the euro will strengthen against the dollar as pressure mounted on the European Central Bank to follow the Federal Reserve in buying bonds to lower interest rates, a policy known as quantitative easing.

“We are taking off our long euro-dollar trade on the lack of follow-through from the introduction of quantitative easing in the U.S. and the pressure on the ECB to move in the same direction,” analysts led by Jim McCormick, Citigroup’s London- based global head of foreign-exchange and local-markets strategy, wrote in a report today. “We believe that dollar weakness will remain a dominant theme but see better opportunities in other places.”


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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CRM  salesforce.com  

CRM could make one further attempt to reach back to its recent high but the MACD and MFI negative divergences are suggesting that this effort could fail.

NSM  National Semiconductor Corporation  

National Semiconductor (NSM) is displaying a bearish configuration in accordance with weakness for the whole semiconductor sector.

SOHU  Sohu.com Inc.  

SOHU has a bear flag pattern and one should now be expecting a retreat towards the bottom of its recent range.