August 26th, the day before GDP announcement

Quick update on my Gold position, I was stopped out of my position.  There was 2 conflicting candlestick patterns, there was a evening star that was confirmed followed by a bullish englufing that was confirmed the day i got stopped out (stop loss set above the top candle of the evening star).  I have picked up 2 silver companies now, expecting metals to continue higher if all goes well tomorrow at the GDP announcment
SBB is a favorite it has been so strong but now it seems like it needs to play catch up to other mining stocks as the metals move higher.  Also I wanted to test the waters with a GPR.  It is a sub dollar stock that is at a point where if it gets above the 0.78 mark it could break up decently.

So lets see on an inter-day what happened to the S&P.

Started up however broke down and formed a triangle.  This is a common pattern found and can be used to enter trades that are pretty low risk.  as the pattern is forming what you want to do it set a short at the break out, say you expect it to drop (It makes more sense expect a drop since the market is in an overall down trend).  Set short at 1052.40where the Light blue line is, and set your stop loss just above the light blue line say
  1052.80 - 1053.  On the Breakdown you would have bought, there was a retest of the light blue line that held, that is confirmation that that line is strong and what do you get next 5 minutes strong selling with a continuation candlestick.  Turning that time the Slow Stoch started to embed and the momentum just shifted.

Now lets see what would happen if you were wrong.  If broke you shorted at 1052.4 and you get stopped out at 1053. A loss of 0.6 points or 0.057%.  If you end up getting a triangle like this getting out you would have to time well, but it reached 1046 which is a 6.4 point drop or 0.61% gain.  I don't trade inter-day, but you could see how taking enough of these low risk trades could be quite profitable.

S&P Critical zone.

The nice yellow line held again perfectly, there was a open around that number then it closed well below it again. Similar to the triangle inter-day, there is a triangle formed, and the question is going to be break above yellow or below purple.  That yellow line has puts us in the previous downtrend channel that was created by the flash crash.  The purple line is the majority of lows.  See where the triangle broke down and reversed.  This can happen again but again odds are if it breaks below the purple line (which is my expectation) more down side will kick in with a test of the 1000, then 950, then if it is strong enough 850.  MACD showed stronger downside momentum and the slow stoch is embedded.

Another note on candlesticks, today we have a Bearish Engulfing pattern. Here is more information on this particular pattern : http://www.candlesticker.com/Cs44.asp

So confirmation of this pattern tomorrow will set us below the purple potentially leading to sharp declines on the S&P.  

Tomorrow will be very interesting.  2 big announcements in the morning so pay attention.

On look at ford just to see what happen today.

Another triangle formation, when the triangle was broken it could not recapture it by days end.  This stock swung from 11.55 to close at 11.18 which is 37 cent ~ 3.2% inter-day which is pretty sizable swing. The momentum is down and the slow stoch is not over bought or sold and pointing down signally more down movement.

Long term chart of ford is amazing.

Look at how the fib fits so well (on any major wave fibs work very well on Ford stock).  Remember stocks can't drop to 0 in a day (or can they!) so this makes alot of sense what happened.  There was a gap down to the 200 MA and close below the 200MA, then a strong move to get it close to the 200MA.  In this morning a strong rally towards to 200MA then a sharp bounce off the 200MA.  So what is this? it is confirmation that the 200MA is a strong area of resistance.  3 closes down, and the bullish engulfing pattern yesterday has been not confirmed by todays action.  the Slow stoch is embedded for more down side and the momentum is slightly up for today as seen on the MACD .  What is the price flirting with ? the 61.8% retracement level.  Here is another situation where a break of that level will be relatively low risk since you buy just below it (or wait for a confirmation so 2 days below it.  And set a stop loss just above the 61.8% level.  Low risk, high prob that it will at least head to the 100% level.


Pure speculative silver play. GPR on the TSX

So looking at the weekly, this stock was trading in the 2.50 range.  During the crash it was taken down pass the 100% retracement.  It has had a solid rally lately.  Focusing on the fib levels of the big increase. The level to watch is 0.94 level.  Breaks above that could push up up over the 200 MA and the previous uptrend.
On the daily.

The stock has just managed to get over the 20 and 50 period moving average to day.  Up at that 0.77 mark.  Using the last increase for fibs you can see a side ways consolidation around the 61.8% retracement  then a dip below to come touch the 50% retracement, with a quick more back up.   I haven't counting this using elliot wave but usually a wave A and wave C correct to a 61.8% retracement and a 50% retracement so getting up over this 61.8% retracement level and holding could confirm this is a new impulse wave to the upside. with an initial target of 0.85 at the 200MA but a retest of the 1.15 mark is not out of the question.