Clean flag

• Posted by admin
• on April 20th, 2012

It’s not often we see such a clean pattern on an ETF like the $SPY.    Smack in the middle of the flag creating a chop/scalper type tape.     Note the additional plays of the 20 and 50smas –   50sma (blue line) still acting as some support while 20sma smacked (green line) the rally down on Tuesday.     A break above the upper trend-line invalidates the bearish pattern and a break below the trend-line confirms it.  However, ETFs  often have much more head-fakes than individual stocks so be on the watch-out for break and reversals.

 

Not often you see such clean reversals off the SMAs in such a short period of time for the $QQQ.   Note textbook bounce on the ascending 50sma and then textbook reversal on the descending 20sma.  Wow.   Pattern is getting tighter here and should bring some volatility once it breaks.

One interesting note — commodities starting to act firmer.  However the patterns there are so broken that it’s going to take some time before they cause a sentiment change.   We’re trading probably 25% of what we traded back in March, trying to find one good trade a day.     For our style of trading this is a time to relax a bit and recharge until the next active period starts again.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus