Daily Form July 20, 2009

Detecting Profitable Patterns For Active Traders

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

MONDAY JULY 20, 2009       06:42 ET

The tiny doji star formation on the S&P 500 Cash index (SPX) sits just above the 200 day EMA and the index is within two percent of its recent intraday high of 956.23 witnessed on June 11th.
Firm prices in overseas markets, in particular Hong Kong (see below), as well as the continuing rally in many key currencies with resulting pressure on the dollar are underlining the now widely recognized fact that risk appetite for global asset allocators is increasing.
This week I shall be looking at the possibility of a break above the recent highs for the S&P 500 to follow on from those seen on both the Nasdaq Composite and the Nasdaq 100 last week.
The possibility of a move up towards (and even beyond) the 1000 level is now beginning to haunt those watching from the sidelines and could spark an abrupt rally if the 960 level is taken out on the S&P 500
It would be preferable for the euro to confirm the breakout by heading back for a test of the $1.47 level but that still seems less clear on the patterns evolving on the intraday forex charts.
For the moment I shall be avoiding the short side in both equities and the euro but am conscious that the trailblazing task ahead for the bulls could easily see sudden setbacks.

The Hang Seng Index in Hong Kong surged by 3.7% in Monday’s session and is now firmly above the 38% retracement level from the historic high and the low seen last October.
The 50% retracement level around 21,300 is now activated for this speculative market.

The euro has broken above the $1.42 level in trading in Asia and Europe which is a short term bullish indicator.
A key target to be monitored for today’s session would be $1.4330 which was touched on June 3rd.


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

DELL  Dell Inc.  

Dell (DELL) could be vulnerable to further selling as the pullback is taking place on diminishing volume.

OSIP  OSI Pharmaceuticals Inc.  

The pattern on the chart for OSIP qualifies as a bullish flag formation.

HUM  Humana Inc.  

Humana (HUM) could meet resistance at the level indicated by the arrow on the chart.