Daily Form August 25, 2009

Detecting Profitable Patterns For Active Traders

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

TUESDAY AUGUST 25, 2009       06:27 ET

The Shanghai Exchange managed to pull out of a rather steep fall during Tuesday’s session as can be seen on the candlestick formation on the daily chart.
The index closed with a 2.6% loss and the most salient technical feature on the chart is the manner in which the 20 day EMA looks set to cross below the 50 day EMA at what is likely to be the possible top to a bearish pullback channel.

The S&P 500 registered a rather poignant candlestick at the end of yesterday’s session which I would almost classify as a gravestone doji. Since that has a rather melodramatic tone to it let’s just say that it is not one of the most bullish candlesticks in the repertoire.

UUP, the exchange traded fund which takes a bullish view on the US dollar index, is displaying a lot of positive divergences and there is clear evidence of accumulation at least on this ETF.

The short term sell signal on the hourly charts for the EUR/USD, discussed here yesterday could have worked out well if short positions had been covered at the $1.4260 level. In today’s session I would be monitoring the $1.4330 level for establishing a new position on the short side.