QLD...again

Back to QLD today, where most of the money was to be made in the early morning. Quick flags printed the trend up where consolidation formed a triangle (15-minute chart) with support at the first resistance pivot line. A break of the triangle took price up to the second pivot resistance line where momentum died out and price chopped around but didn't give up much ground overall. As you can see oil (as represented by the inset USO chart) is a big determinant to where the indices are going to go.Looking at the Nasdaq Composite Index price is about 1/2 way to the measured move out of the inverted roof, with about 79 points left. Who knows whether it will complete the move up to that resistance level, but it looks pretty strong here.

Hesitation...

...was my repeating theme today. I gave up on QLD today and focused on the Diamonds Trust ETF DIA. I missed/hesitated on the inverse "Holy Grail" set-ups to the down side. The DIA bottomed/found support (the 200-MA on the 30-minute chart and trend line support on the daily), while also set up an Inverse Head & Shoulders on the chart I was watching (a share bar chart that correlates to a 5-minute chart). I was also watching USO/Oil to give clues to the potential break-out of the Inverse H & S. As USO seemed to top out DIA began to move. Initial target was somewhere between 38.2% & 50% Fib. retracement (from yesterday's close to today's low) depending on the momentum behind it. Price hesitated at 38.2% and got a pop to the 50% level (where it consolidated).
I then continued to watch as DIA formed a cup w. handle pattern on the 15-min. chart. For some reason I couldn't commit to pulling the trigger to buy on the break of the rim. Hesitation payed off in this case, as a break of the rim failed at the open range high, as well as Oil holding onto it's highs of the day.

Chop

A choppy, messy day. I'm preferring to stick with watching one market lately (that market being the Ultra QQQ ProShares, QLD). It feels to me like a good method to learning to read "the tape." So, here's the one set-up that gave a decent probability to a trade in your direction. On the 15-minute chart (smaller inset chart) a triangle set up over the course of the last two sessions. The faster chart gives a better perspective. You can play it aggressively and short in anticipation of the break-down (somewhere in the long red candle), or more conservatively as price breaks the trend line (same long red candle) or makes a throw-back to the trend line (green high-wave candle).
On the shorter time frame chart (the larger chart) I have an ellipse around an indicator that fires to alert you when Bollinger Bands are squeezing inside of a Keltner Channel. It's not an indicator to trigger you into/out of a trade, but it lends you a condition to increase probability.

QLD trend day

A beautiful trend in QLD right up until about 2p.m. when the longs seemed to cover at the R2 Pivot Point resistance area.

QLD trend day

A truly awesome trend day today, Nasdaq up 2.5%. The following is a chart of QLD, and what an orderly chart it is. A lesson in tape reading...

Inverted Roof

It looks (to me) like an inverted roof has taken shape across all of the major indexes and we're testing a break out above resistance, which could bring us a measured move to the upside, if we could get past the major 50-period Moving Average resistance.
Volume on the break of resistance for the Dow is pretty unconvincing, but a measured move from here puts the upside at around 872 points.
The S&P500 breakout would add about 90 points to the upside. It needs to clear the 50-EMA at this point.The Nasdaq has definitively broken out of this pattern (and above it's 50-EMA) and give us a target of the 2530 area.

QLD setups

QLD using 45,000 share bar chart, trading breaks off of trend lines.

QLD & FCX

QLD had some nice set-ups on it today. Here I'm using share bars which I'm tending to prefer these days.I set an alert this morning for FCX near the highs. When it triggered I bought and picked up about $1.50 quickly. I intended on shorting the second test/failure of the highs but got distracted.

Healthcare

IHF; iShares Healthcare ETF is perking up (perhaps a strategic play in case the Democrats win the White House??). This ETF has top holdings such as AET, HUM, WLP, and CI, that have seen recovery moves of late.

Rotation

The charts pretty much speak for themselves. Using these ETFs as a general representation of sector performance, many of the big names that have been in play for the past few months are breaking down below their 200 EMAs.
There's MOO, Market Vectors Agribusiness ETF (main holdings include BG, MOS, MON, POT). Or, you can check out DBA.KOL, Market Vectors Coal ETF (top holdings include WLT, CNX, MEE, ACI).
SLX, Market Vectors Steel ETF (top holdings include X, MTL, RIO, MT)IYT, iShares Dow Jones Transportation Average is in limbo at the moment, but might be good if Oil continues to the downside (top holdings of BNI, CSX, FDX, NSC, JBLU, CAL)
And then there's PBE, PowerShares Biotech ETF (top holdings being ABI, DNA, GILD, WAT)

KOL

Market Vector's Coal ETF. KOL shook off it's overbought bias and reclaimed it's 20-day EMA.

EWZ

EWZ, iShares Brazil ETF, snapped up today to cling to it's 200EMA. It's also printing a bullish momentum divergence.

watching

PBW is a clean energy ETF with solar holdings that we all have on our watchlists.SLX is a steel ETF that might be a good play this week as we saw some big moves today in AKS, RS, MTL (bullish hammer after capitulation?), X, MT, et al..

DIA

DIA had a trend-day to the downside. It set up a base break at $113.10 early in the morning. It then consolidated around $112.20, tagged the 20MA (Inverse Holy Grail) before continuing lower. Consolidation then took place for an hour and a half at around $111.65 (which coincides with a 61.8% Fibonacci retracement from the high of July 22 and low of July 15) before breaking lower. Pretty text-book stuff.
Same story with the Q's.Something to keep in mind with these trend days comes from today's post at AfraidtoTrade.com, Corey writes:

"Most trend days begin with two common characteristics:

A low-range day prior (usually a NR7 or a doji pattern)
A (relatively) large opening gap

The last two trend days (the last was the previous Thursday) had slight but not ultra-range contraction, but neither began with a large opening gap. In fact, both were ‘creeping’ trends, which tend to be the most insidious, hidden style of trend days. Lack of an opening gap can lull us into complacency as we fail to recognize the potential for the trend day to unfold. It’s far easier to anticipate a large intrday trend day move if the initial gap occurs (and especially if there’s some sort of major news announcement)."

U.S. Dollar; Effed in the A?

With CPI numbers coming in larger than expected and inflation fears hinging with the Fed., concerns over the U.S. Dollar are prevalent.
Typically you see Head and Shoulders patterns at the top of bullish trends, but that doesn't mean they can't appear during consolidation of a bearish move. In this particular case in the U.S. Dollar index the short-term trend was up from the period between late April and mid-June before falling through it's trend line, pulling back and forming the right shoulder. Currently the index is struggling to stay above it's neckline, which we should expect it to do being that it's at a major level of support. A measured move from this point below the neckline would put this index at fresh lows in the $69.55 area. Check out patternsite.com for determining patterns and the measurement guidelines. Also, check out etftrends for ways to hedge against a bearish dollar through ETF's and ETN's. Particularly; FXE, ERO, DBV (Ascending Triangle on this one).

Broadening Wedge

It appears Biotech is attracting attention currently. Here is a Broadening Wedge pattern that's taken shape in BMRN. If for nothing else, it will be interesting to watch and see how it reacts. From patternsite.com a measured move would put a break-out/-down at +/- 12%, while keeping in mind the possibility of a partial decline (explained in the patternsite.com) before the breaking move.

re-update

For posterity I'm updating the action of AAPL stock so as to follow up from this post and this post. The 30-min chart is a good near-term summary.The weekly isn't broken yet. It will likely be up to the overall strength (or lack of) in the broad markets to determine what will happen here.

The House of Cards...

....comes tumbling down, doo dah doo dah.
Where do we go from here? The path of least resistance tells us...
DJIA - ouch, how low can we go!S&P 500 still got a way to go to truly test those March lows.Same with the Nasdaq...got another 150 points to lose before the March lows are firmly tested.The Russell 2000 as represented by IWM just broke through it's Head and Shoulders top pattern. Broke through the neckline, tested, and may not look back.Now for Gold and Oil. Oil, as represented here by USO, is basing around it's highs. One bad news report could send us to new highs yet again.
Gold, as represented here by the ETF GLD is back up to resistance. Although the near-term trend is down, the momentum divergence is showing a positive slope.
And last but not least, the U.S.Dollar index. It had a run for a few weeks, but looks primed to test the lows it became comfortable with.

update...

After my post about Apple stock yesterday, check out what today's price action did to the charts. It's fighting to stay alive that's for sure.
The 30min chart MACD diverged and went bullish while making a run at the triangles upper trend line.
The daily got support off of the 50EMA (around $174) and the MACD looks poised to cross over.This weekly chart is looking nice if it can accelerate above the handle at $185.

Is Apple Finished?

Apple stock is languishing, along with many big tech names. With three successive lower momentum highs, the stock looks like it could be gearing up to roll over and test the 200EMA back at the $156 level. Perhaps much will depend on what happens in the broad market in the short-term.
The weekly chart demonstrates a steep cup w. handle pattern which could portend higher prices in the weeks/months to come. While on the same weekly chart we see the MACD fast and slow lengths converging. A crossing of these lengths = short bias, should the lengths diverge there could be some bullish optimism.The daily chart seems to have an extended cup w. handle pattern drawn out as well. The negative aspect of it being that the handle has become over-extended which could allude to the stock price rolling over. Looking at an intra-day (30-min) chart we have a MACD about to cross down, along with a triangle/wedge pattern taking shape and resting on support. Perhaps the near-term price of Apple stock will correlate with the Nasdaq and whether we see more selling. But, it's not looking to bullish for Apple at this point.