Daily Form September 3, 2009

Detecting Profitable Patterns For Active Traders

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

THURSDAY SEPTEMBER 3, 2009       06:24 ET

While watching the cat and mouse game which continues to play out between the equity traders who are looking for rallies to sell and forex traders that are stretching out into the currency plays while all seems quiet on the S&P 500 front, the one new dynamic which entered proceedings yesterday was a surge in gold.
The metal has continued to rally in European trading today and as the weekly chart suggests the metal is now on the verge of either a major breakthrough which could propel it far beyond $1000 or a failure at what would be its fourth attempt to regain the levels above $1000 per ounce from March 2008.
Assuming the breakout, which from the technical pattern does look quite persausive, the question becomes for me - does this portend a serious rupture in the US dollar’s attempts to base?
Perhaps what it might be indicating is that anxiety about further equity drops (perhaps in Asia) may be causing some to seek out gold as well as the US currency as a safe haven asset.
Any de-linkage between "the buy dollars when equities are under attack mode" would require inter-market traders to re-tweak their correlation models between appetite for the US currency and aversion to more speculative risk.
Even more provocatively if gold does break out above $1000 this could be in anticipation of renewed questions from the BRIC countries regarding the status of the greenback as the global reserve currency at upcoming G20 meetings?

The yield on the five year US Treasury note has retreated almost to a level of previous support/resistance.

Despite a five percent jump in the Shanghai market equities in Europe have been drifting in Thursday morning’s session. Germany’s DAX index could be setting up for another test of the 5150 level seen on August 19th.


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

TMO  Thermo Electron Corp.  

Thermo Electron (TMO) has broken obvious support and looks to be targeting $40 in the intermediate term.

TBSI  TBS International Limited  

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

KR  The Kroger Co.  

Kroger (KR) has a combination of a bullish pullback (flag like) pattern and an Ichimoku buy signal.