Daily Form May 14, 2009

Detecting Profitable Patterns For Active Traders
Trade successfully without having to be right about the underlying market direction
THURSDAY MAY 14, 2009       06:58 ET

The S&P 500 broke down below the ascending wedge pattern that has been discussed here recently.

This is technically ominous and suggests that the 200 day EMA level will be a major overhead hurdle to contend with in coming rally attempts.

I would not be enthusiastically bearish at this stage as I suspect rescue efforts will be made, and if we are about to witness another significant leg down there will be ample scope for playing some of the inverse sector funds in coming sessions.

The Nasdaq 100 (NDX) having lead on the way up could now prove to be the most vulnerable to a sharp correction.

I would however expect to see some attempt at consolidation in the region of the 50 day EMA at 1300-1310.