Monday, February 01, 2010

Resting Up

There's my Grammy taking her break before she shorts the devil out of this tape some more. (okay, so it's not really her, but you can bet she'd serve a good short wallop when she's done smoking that stogie.)

TTWrs fully expected this bounce today, and the question now is: how high will it bounce this week. Well, no one knows for certain, we'll take it one session at a time and keep an eye on resistance levels and counts on the various sectors, commodities and currency pairs we watch. Our friend and fellow trader, Wallfly had this to say at the closing, "Yup, wave 4 confirmed on the 30 at the close."  Wallfly, I'd like you to know how lucky we are to have you trading alongside of us, by the way. Your work is very much appreciated.

Moving on to the bigger picture it's important that we keep our eyes on the longer term charts, and the weekly charts in particular are still pointing to an IT downtrend, as well as many bearish configurations of the EMAs on daily charts now. Keeping that in mind, if you're counter-trend trading this week, please be careful not only in what you're trading, but where your targets are and what kind of exit plan you have in place should the wheels come off the bus quickly again. Stops are your friend on a wave 4. I am only looking at indicators in broad terms, if at all right now because as we learned during the Spring/Summer, we can remain oversold for a very long time and indicators can become a mirage to create bull traps. (goes both ways, of course) Use some patience and finesse above all things.

Our DM counts remain on a sell set up for the monthly and weekly charts. All in all, I look forward to this week as I believe it only serves to create some lovely bearish patterns across the spectrum for us to trade. To top it off, some of us are watching certain cycle factors that should be coming together as the week continues. Overall, the bear is just taking a break to smoke a cigar. If you're not feeling risky, now is the time to set up your charts and mark your entries/exits. A good trader doesn't have to chase, he/she only reacts like a ninja at the planned point of execution.

One other quick request: as the week progresses, and if you have time to spare, let's all hunt down the best possible ways of deploying our trading cash. In other words, the best/cleanest DM counts, good/clear patterns and so forth, on stocks that are either on Osi's DM list at the bottom and/or have good liquidity for our options traders, as well as decent ATR. As I find things I'll be sharing charts in the regular posting section too. TIA.

On the economic calendar tomorrow: before the bell- Motor Vehicle Sales, ICSC-Goldman Store Sales and the Redbook. At 10:00 Turbo Timmy will flap his jaws, and also at 10:00 AM, Paul Volcker will be speaking. Additionally at 10:00 will be Pending Home Sales, so that Ten o'clock hour should be a busy one.

Earnings tomorrow include: before the bell - ADM, BP, COCO, DOW, KFT, PCX, UPS, WHR. Post session earnings will include: AFL, EXM, MTW, MEE, VRSN, NETL. Also keep in mind CSCO will report after the bell on Wednesday.

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The DDT Chart

DDT DM mon

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Okay, FX team.. we're handing it over to you now. Shake 'em up tonight!


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