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Was that the Right Shoulder??

 
 

Sent to you by Dominic via Google Reader:

 
 

via T3Live Blog by Brandon Rowley on 6/22/10

By: Scott Redler

Sometimes it's hard to look ahead but you always need to have a plan. We tried to outline the potential head and shoulders pattern before it developed on June 3rd. The potential "right shoulder" was at first 1120-1140 as you can see by the chart from June 3rd. Then as time evolved I was thinking 1130-1150. Bottom line, as hard as it is to paint the picture, it's also hard to act on your plan as the market confirms it.


On Monday the market gapped up to 1131-- the 50% retracement and right smack in the middle of that
resistance zone of the right shoulder. I mentioned not a time get excited, but to take profits. But I missed the shorting opportunity because I did not think the market was ready yet or we would continue to the end of the quarter. So half of the strategy was executed. We mentioned to watch yesterday's low of 1108 for follow through to downside today. Now it's time to see if it's game over for this rally. In my opinion the 1080-1085 level must hold for a higher low for any chance of this new fledgling market rally to stay intact.


We did see some damage in the tech sector, as it lead the market reversal on Monday. Oil and banks still can't sustain a bounce. Goldman still can't break it's downtrend and banks still remain trapped. Casino's broke their upper range, so they will need time.

Tomorrow should be an interesting day. I will take small NYSE:SPY long on the close. I'm hoping for a nice gap down to buy in my "line in the sand area" just for a trade (1080-1085). Most traders want this to happen, so I need to take small overnight in case they try and gap up and trap some shorts.

 
 

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