2008 Top inverted

Inverted 2008 Top

2009

Pretty telling and easy to formulate a trading strategy with this kind of advantage.....

It is indeed a Good Friday...

Happy Easter

SPY

I'm seeing some pretty clear trading ranges as this bottoming process continues. And I guess we're going to become experts in the Inverted Head & Shoulders pattern.

The YTD darker dotted lines are sporting this pattern as the lighter shades show the slowing rates of trend change down as well as up.

As a note I went back and looked at the October 2008 top and found a similar 3 month topping H&S pattern. You may find it interesting that it retraced to the next to last line before falling. Meaning if this is the bottom we could reasonable expect to see 75 on the SPY or 750 on the S&P 500 before the Bull market can begin in earnest.

Short-term range from the rising EMA's at 81.0 to 87.41
and then again from 87.41 - 94.45

Remmber as the pattern completes the breakout will eventually fail and the swing down will be quick and violent. So as we approach these lines of resistance it's an easy trade to get short toward the tops of channels and get long toward the bottoms of channels with stops just on the other side.

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SPY - bottom a process

May go higher - may go lower
The rates of ascension/descension are MUCH slower....

The bottom is a process which ALWAYS has a test.

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SPY breakout on low volume

The media are all abuzz, about the breakout to the upside...

Be careful as the Inverted H&S pattern has yielded it's breakout higher, but when this fails the turn-a-bout will be quick and violent to the downside

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FDX versus UPS annomally

And checkout the best in breed shippers....

UPS is killing FDX...what is that about 33% YTD outperformance on price? And the divergence did not begin until mid Feruary....

The same short covering question is raised here as well...

What gives: Are we seeing price performace out of the stronger company now becoming the BEST in breed? Or is this just Short covering?

Either way this is definitely tradable, I'm just not sure how to go about it....

Any suggestions or thoughts?

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Homebuilder retailer anomally

Why has Home Dopot outperformed Lowes by such a huge margin Year to Date?

Looking at the charts separately HD is over it's 200 day EMA and LOW is just now approaching the underside.

Could it be that HD had a HUGE short volume on the way down and those traders have been covering? Or is HD truly 20% better than LOW going forward?

Either way because of such a huge disparity could a safe trade be to short HD and get long LOW using out of the money October Options until this gap is closed?

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ProphetCharts: CALM

CALM the egg producer in New Enlgland area breaking the downward trend and moving sideways

Long with stop just below$22.50

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SMG

Scott's is showing strength as upwardly slanted Inverted H&S is consolodating on weak volume

Long with stop between 20 Day & 50 Day EMA

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GRAN

Bank of Granite is not an Optionibla security; however, they are still paying a healthy dividend.

The Financial group still has not turned and it is possible to pick up GRAN sub $1.25 as the descending triangle will soon break.

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MET

MET has broken the downtrend and crossed resistance back into a previous range by completing the Inverted H&S and breaking out....

Now the line of support at $22.50 must hold or $15 is a real possibility in a hurry....

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SPY daily

The inverted H&S pattern completed and consolodation on weak volume back to test the rising EMA's is making a bullish case and a fairly safe trade with stops just below or loosely below the EMA's.

Bottom-line is a significant move is getting ready to take place....which side has the greater risk/reward?

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SPY 10 day - 10 min

Channel-lines showing how the consolodation could be forming a Bull Flag back to rising EMA's

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S&P 500 60 DAY

About to break the uptrend....

Gotta get below 820

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China Check: FXI

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RIMM

RIMM on the other hand is looking very strong. That EZ short has long been stopped out and it's looking like a break above $64 and we'll see $76. The time to short will be the first lower low.

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AAPL

Apple's price may be going up, but for how long on such weak volume?

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FMD

First Marblehead showing signs of life....

Up 44% on triple average volume.....

Next stop $3.36

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SPY

Volume telling the story over the last ten days....
Voulme up on up moves and
Volume Down on down moves

This 10 day 10 min looks like a Cup with Handle getting ready to launch. This could be a huge setup for either side, but we may see a short squeeze to 875 before the end of the week.

I'm long calls with a stop at 82.20....

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A Sunday night look at charts......

A look at Precious metals, Gold, & the 10 yr note: Is it conincidence they fall to support as the overall market has risen to resistance?

Here's a look at homebuilder KBH, LOW, HD, & MAS:
Pretty easy to see which are topping and which have yet to move or continue to plummet.

And lastly a glance at 4 major ETF's -

XLE (Energy), RTH (Retailers), XLF (Financial) , & XLB (Materials)

Energy & Retailers up quickly to meet resistance as Financials are still heading southeast.

Checkout Materials as they look to still have some upward move and momentum left.

Does this make a case to be:

Long short term Gold & Materials while shorting the Overall Market; especially the Retailers & Energy names who have "popped" recently as profits may be taken?

The case to stay away from Financials remains.

Economic Calendar & Earnings

So the media is saying that the market is holding up when it receives BAD news....
Well next week there will be O'Plenty of it folks. The way I see it you'll have Monday to make up your mind if you have the cojones to get short. But the real bottom line next week is "Will traders want to be in the market after Thursday?" Market closed for Good Friday and going into a vacation week for many. The answer of "is this Bull market for real ?" WILL be answered this week.