Gold - Is the Endless Up Trend about to End?

GOLD - WAIT (WARNING)

Although Gold seems to be on an endless up trend we are starting to see some signs of weakness which seem to hint at a potential top coming very soon. Gold's last high was around $1425 on both around November 8th and December 8th before it pulled back down. Gold seems poised to test this level again; most likely by the end of this week. The question is, will Gold manage to close strongly higher or pull back for the 3rd time? Although Gold is still trending up, the trend is certainly slowing down. We are now starting to observe a potential ascending triangle pattern, which would be confirmed if Gold pullbacks again around $1425 and falls below first the 50 day MA currently around $1372. If Gold then falls below $1340 and $1325, the pattern and beginning of a down trend will be confirmed. Something that gives strenght to this argument and possibility is the fact that we can observer a negative divergence between Gold's trend and the MACD's trend. Gold is currently still trending up but the MACD has been trending down against the trend since around October 18th. The Stochastic has also been trending down during the same period. Keep in mind that Gold has been trending strongly above its 50 day MA since the month of July where it briefly crossed below it before reversing back strongly back above it. Is Gold about to crash and burn? Not necessarily, it is still very early to call a high, even if Gold does indeed break the up trend. Such a statement could only be confirmed if Gold were to break other major support levels at much lower levels around the 200 day MA. If Gold were to break down, this may not mean that it will start a long term down trend. The first critical support level it could reach is around the 200 day MA around $1250. If Gold bounces back up at $1250, this may actually be a good entry point and perhaps a resumption of the up trend.


The most important chart to look at is the weekly long term pattern of Gold. By looking at this chart we can see that Gold has not broken its 50 day MA since the end of 2008 and has been trending above the 200 day MA for now over 3 years. A break below the 50 day MA could easily send Gold back to $1000. If $1000 and the 200 day MA is broken, then we would be in a major long term down trend. Until $1000 is broken, Gold's long term trend will remain up.

Something however is clear in terms of daily chart is that the up trend is weakening and something leads me to believe that Gold's down trend will likely coincide with the beginning of the new year in early January. The trend may not necessarily play out as I expect it to, but I do believe we are getting very close to a top with Gold. I would definitely not take any position with Gold right now as we at dangerous levels whether you choose to go long or short. The best decision to take right now is to WAIT and see if the pattern I expect to occur happens; we will have a better idea then of what to do. There might be a short term opportunity to short gold which could potentially turn into a long term opportunity. However, keep in mind than when anything starts trending down, a lot volatility comes with it. What if Gold breaks above $1425? If this occurs I don't necessarily believe that this potential pattern I'm observing will be null, but only that it might take a bit more time before Gold breaks down. Something that could likely occur in that event would be a tightening of the trend like it is already in right now. After this, Gold must break up or down. Basically we are near a very critical point in terms of the future direction of Gold.

Coming Back!

Hi, everyone as you may have noticed I haven't updated my blog in quite some time (nearly 4 months) because I have been very busy. However, I did miss a lot writing on my blog and have now decided to make an effort and re-start writing on my blog on the first week of January. I will make my best to update my blog at least once a week (most likely Friday evenings). I will try my best to answer all your analysis requests. Over the past few months I've been working on an updated version of my trading strategy Y-Swing as well as updating my Excel based Trading Manager software. As things move forward my strategy is continually evolving and I am hoping to share this with you in the near future. I am planning on making my first post at the latest on Friday, January 7th.

Dow Jones - Time to get back in

Hi, everyone I know I've been away for a long time and haven't written anything on my blog for 2 months as I am very busy, but I felt that I had to write an analysis of what I expect to see occur in the market in the upcoming weeks and months. I haven't had the time to monitor what has been going on in the market as of late, but I did start looking at the charts again since last week, particularly the Dow Jones. I am not sure at what frequency I will be writing on my blog, as I am very busy, and I cannot promise that I will be able to make timely updates. As you can see I no longer update my blog regularly, but may still do so from time to time. There may be periods where I write very little like recently or a little more if I find the time. I will try my best to write analysis when I see major developments or trends occur in the market.

Dow Jones - BUY SIGNAL

Obviously the Dow Jones had been in a minor down trend for the past week, but after seeing a sign of a possible rebound yesterday and a good move up today this was enough for me to convince myself that the Dow Jones is now looking to resume its major up trend. I do believe that today was the beginning of a move for the Dow Jones towards at least back up to 10900 or 11200. This may not move straight up towards those levels, but I do expect the tendency for potentially the next 2-3 months to be up. However, I strongly believe that if or when the Dow Jones does hit those levels that we will have a double top and the beginning of a major down trend that could likely send us back towards the lows of 2008, where we might probably find ourselves in a new crises. This may be a little too early to say, but as of right now this is what I expect to see happen. In the mean time, I am looking to get in on a few stocks tomorrow as I am currently all in cash. I think that there is some good money to be made on the long side for most stocks, with a few exceptions of course.


When we analyze the Dow Jones' daily chart, we can see that we got a doji bar yesterday which hinted that the current minor down trend had bottomed. What straightened this possibility is the fact that the doji that occurred yesterday traded below the 50 day MA before bouncing back up and regaining practically all its daily losses and thus closing above the 50 day MA support level. Today we had our first confirmation of the bottom by seeing the Dow Jones move strongly back up with a higher low and higher high. However, as I expected it struggled to close above the resistance levels at the 20 and 200 day MAs. I don't expect to see the Dow Jones have too much trouble closing back up this level, but if there were to be any it could be for only a day or two starting tomorrow. That's why I believe tomorrow should a good day to make an opening long position. As long as the Dow Jones stays above the 50 day MA, I consider to be safe to take a long position. What leads me to believe that the Dow Jones will continue its major up trend potentially quickly (2-3 months) towards its yearly highs is the fact that today's up move triggered a BUY SIGNAL by the Stochastic at a very oversold level around 15-20. Now when we look at the trend for the longer term, it seems like the Dow Jones is in the middle of a rising wedge pattern which may conclude near the yearly highs before reversing strongly back down. It is however too early to say, but as of right now this is what I expect to see occur.

NFLX - Moving in a Strong Up Trend

NFLX - BUY


NFLX is one of the rare stocks that has been holding up well since the beginning of the market's major down trend in May. Since the month of February, NFLX has been trending above its 20 day MA and most of the time towards its upper Bollinger Band. Only twice and briefly during the month of May did NFLX break below the 20 day MA. However, it quickly rebounded at the end of the month to resume its trend. One sign of strength is seeing the Stochastic trend in the 80-100 level. Although it briefly broke that trend in May, NFLX is now back around these levels. I do expect a little pullback from NFLX sooner rather than later, but only a minor one bringing it towards the 20 day MA. NFLX is a BUY, but it would be perhaps wiser to wait for it to pullback a little towards its 20 day MA and seeing it bounce back up before taking a long position. Based on the current chart, NFLX is definitely not a stock I would short. Whenever you decide to take a long or short position, even for the short term, it is always best to go with the major trend, and NFLX major trend is currently up.

MGM - Bottom?

MGM - WAIT

When we look at MGM's daily chart we can see that MGM has been moving down in a major down trend since the beginning of May below the 20 day MA. This past Monday, MGM traded
below its 200 day MA for the first time since August 2009. On Wednesday, MGM tried to recover its losses and move back above its 200 day MA but failed and closed lower. MGM is now again just below its 200 day MA around $11.60 and will likely attempt again to move back above its 200 day MA. Despite the very bearish signal of MGM trading below its 200 day MA for the entire week, it may have bottomed and we should get a definite answer next week. The fact is that MGM has higher lows for the past 4 trading sessions which gives MGM the potential to drive back up the 200 day MA. MGM is currently a WAIT for a break back above the 200 day MA which may coincide with the break of the 20 day MA as well. Until MGM manages to break back above these two critical MAs, I would stay on the sidelines. With that being said MGM does have relatively decent support around the $10.50 level. However, if MGM does fail again next week to move back above the 200 day MA, I will consider this as a resumption of the down trend and therefore issue a SELL SIGNAL. One important thing to note is that although MGM has not given us a clear signal yet, the Dow Jones did close above its 20 day MA for the first time since the beginning of this major down trend. If the Dow Jones can manage to hold up and move higher, MGM will most likely follow along and move higher. Taking a long position with MGM at this level is a gamble, but one that is relatively safe with a stop loss of around -8%. However, two clear signals of a resumption of the down trend would be first to see MGM fail to move above its 200 day MA and then to close below this week's lows and below the $10.50 support level. If this support level is broken, MGM could accelerate very quickly down towards $9.00.

Dow Jones - Still Waiting on the Sidelines

Dow Jones - WAIT


Since the beginning of the month of May, the Dow Jones has been trading in a major down trend. However during past few trading sessions the Dow Jones has started to show support around the critical 10000 support level. In fact for the for the past 7-8 trading sessions, the Dow Jones has been trending sideways between 9900 and 10250. Despite showing some support around 10000, I still advise to WAIT on the sidelines as the market is still relatively volatile despite seeing a little more stability lately. Keep in mind that although the Dow Jones has jumped up over 200 points today that the Dow Jones has yet to have 2 consecutive positive trading sessions since the beginning of this major down trend at the start of May. I currently have only one long position which was taken after seeing the Dow Jones hold up above 10000. The next signs I will be looking for to confirm a reversal and a potential new major up trend, would be first to see the Dow Jones close up for 2 consecutive days and then to see it jump above 10250 and 10400, above its 20 day MA. The moment the Dow Jones manages to do these 2 things, I will consider this to be a confirmation of the reversal of the trend and potentially the beginning of a new major up trend. The MACD is starting to move up and getting close to breaking above the signal line, which is somewhat promising to see the Dow Jones' trend reverse back up. Based on the current conditions, I do believe we will have a relief rally sooner rather than later, however I doubt we will be hitting new highs for the year. The most likely and optimistic scenario would be to see the Dow Jones move back towards the peak of 11200 to only see it reverse back down. The current major monthly trend is down, while the major yearly trend is sideways and this will remain true until the Dow Jones either breaks down sharply below 9900-10000 or break up above 11200.

Dow Jones - Breaking Down

Dow Jones - STRONG SELL SIGNAL

With the market continuing to sell off and moving down sharply, the Dow Jones has broken yet another critical support level; the daily 200 day MA.


The last time the 200 day MA was broken was at the beginning of the year 2008, and I don't need remind you what happened thereafter...


At this time the Dow Jones has some support at 10000 and 9900, but another sharp move down that causes the Dow Jones to close below these levels could send the Dow Jones back to 2008 and early 2009 levels. Obviously, this would be catastrophic but is now a feasible reality. The Dow Jones is also now trending below its 20 day daily MA and only when the Dow Jones will manage to move back up this MA can we expect a possible reversal in the trend. Right now we are standing near critical levels which could dictate where we might be heading for the rest of the year. If the Dow Jones manages to bounce back up 9900 and 10000 to eventually break back up above the 20 day MA, this could be just a simple correction. However, I do have to admit that the way the market is acting right now and with the volatility we are seeing, this is looking like the beginning of 2008 all over again. There is still hope for a reversal, but things are obviously looking very bearish. The 10000 support level at the 200 day daily MA coincides with the 50 day weekly MA, which means that a closing below this level would be even more significant and perhaps even more reliable.

Right now, I wouldn't jump in at taking short positions, given the fact that we have already moved so low in such a short time and also because we are now standing near critical support levels which a bounce back up from could be our last hope of seeing the market reverse back up. Keep in mind that until the Dow Jones moves back up over its daily 20 day MA, that the major down trend will remain intact. At this time and especially if the 9900-10000 level is broken, you should take short positions for the long term and only short term long positions (max 1-2 weeks holds) on throwbacks. I do expect the market to bounce back up sooner rather than later, but again seeing the trend reverse back up is not very likely, as I expect the major trend to stay down for a while.

MGM & Dow Jones - Wait & See

MGM - WAIT



After breaking below its 20 day MA last week, MGM broke its major up trend and started a minor down trend. MGM finally managed to bounce back up its 50 day MA after trading below it and has since rebounded. At this time MGM is both trending up above its 50 day MA again but also trending down below its 20 day MA which gives us somewhat of a sideways trend despite the recent move up. The Stochastic is about to give us a BUY SIGNAL, however I wouldn't jump back in MGM before it breaks back above its 20 day MA (currently around $15.13). MGM's chart sort of portrays the market's current situation. At this point, after going through a big sell off last week, we don't know if the market will continue higher from here or fail to hit higher highs and trend back lower. What makes everything more risky is that the last peaks now represent significant resistance and we will only know if we reach again these levels if we are heading higher or back down. Despite the presence of short term opportunities on the long side, the market seems much risky and volatile than it was a couple weeks ago. I personally took a few long positions since Friday after seeing a little rebound, however I don't expect I'll be able to hold on to them for very long. What seems apparent now is that we are in a volatile environment which could make you win or lose a lot of money very quickly, and that is why setting stop losses are very important. My gut feeling is that the major trend for most stocks will be down while after every big sell offs there will be short term opportunities on the long side. At this time MGM seems riskier than some other stocks that offer a better risk/return opportunity. I do believe that one of the safest stocks to be in right now is Gold stocks, since whether the market moves up or down it should be some of the most outperforming stocks in the market on the long side. What leads me to believe the market will continue lower in the long run, is the fact that despite seeing the market moving back up right now, Gold continues to hit new all time highs which indicates that fear is still present in the market. I personally feel that we could see much more trading sessions in the triple digits both on the up and down side, with a stronger down pressure though. At this time, you want to be investing very carefully and you should be prepared to be more active as I think we will continue to see a lot of volatility.

Dow Jones - SELL

Looking at the Dow Jones' chart we can see that despite the big rebound yesterday, that the major down trend is still down and a long term SELL. However, as I am writing this the Dow Jones is sitting below a critical level, just below its 50 day MA around 10850. Another gap down tomorrow will reaffirm the fact that we are in a major down trend as the 50 day MA now represents resistance. If that happens, you should consider as I will exiting your long positions and move back towards taking short positions. As I said before, we are in a very volatile environment right now which is looking like 2008.

Dow Jones - Down After All...

DOW JONES - STRONG SELL SIGNAL (Updated May 6th)


After getting a SELL SIGNAL from the Dow Jones last week, the market bounced back up with a BUY SIGNAL to only fall even lower again this week and thus giving us conflicting signals. What is clear now is that the market has gotten very volatile again, and the Dow Jones has now finally broken sharply down its 20 day MA and thus breaking its trend that had been intact since mid-February. However, one important thing to note right now is that after hitting its 50 day MA today around 10800 the Dow Jones bounced back up and potentially could move a little higher in the upcoming days. However, we are now clearly in a down trend and even if the Dow Jones trades back up in the upcoming sessions I think we will continue to experience a lot of volatility, and I don't think we'll see the Dow Jones hit a new high any time soon. We are not in a correction yet, but if the Dow Jones breaks down below its 50 day MA we will most likely be in a correction. With that being said, I don't think you even have to look at the charts to come to this conclusion. The truth of the matter is that fear is back and increasing, due to many factors one being the Greece crisis. However, there are also other events that have already had an impact on the market that could get worse in the near future. The Iceland volcano has re-erupted a couple days ago affecting some flights in the U.K. and Ireland and no one knows or can predict what another eruption could do. Also there is no way to predict what the Oil spill from the Gulf will continue to have on the economy. To conclude, it is clear that there are many risk factors in the economy that could send the market even lower than it already is and that is why I am now choosing to stay on the sidelines. Right now the market is good place for day traders to make a lot of money with the current volatility, but this is not an environment where swing traders and investors would want to be in. In the very short term, I think we could see a little bounce back up towards the Dow Jones' 20 day MA but in the long term things are looking down. At this time I am staying on the sidelines and issuing a WAIT signal for the short term and a SELL for the long term. Basically I think if you wait to see the market bounce a little back up, this could be a better opportunity to take short positions.

Dow Jones - SELL SIGNAL Fails, The Trend Up Continues

DOW JONES - BUY

After closing higher yesterday and being strongly back up today, we can confirm that the Dow Jones previous SELL SIGNAL has failed. After today's strong move higher, we can now expect the Dow Jones to resume its trend up and continue to hit higher highs. This will remain true until we see the Dow Jones move strongly down below its 20 day MA which it failed to do over the past 2 days.

Dow Jones - The Beginning of Another Correction?

DOW JONES - SELL SIGNAL


Today the Dow Jones had the biggest one day drop since the month of February when the last correction had begun. The Dow Jones gave us multiple SELL SIGNALS today, starting with the Dow Jones breaking below its 20 day MA since mid-February. Both the MACD and the Stochastic also gave us SELL SIGNALS today. The next couple of trading sessions should give us a clear picture of whether or not we are indeed starting a correction or if this is just a false SELL SIGNAL. My personal intuition tells me that this is indeed the beginning of another correction since January. Now if the Dow Jones does continue lower in the upcoming trading sessions and stays below the 20 day MA, the question is how low could it pull back to. By looking at the daily chart we can see around 5 significant support levels that may be tested in the upcoming weeks if the Dow Jones does indeed start a correction. The next significant support levels stand around 10800, 10700 (50 day MA), 10500, 10400, and 10300. I think it is very likely that we will see the Dow Jones pullback at least to its 50 day MA and I wouldn't be surprised to see it break lower as it did in January. If the 50 day MA is broken, I think there is a very strong potential of seeing the Dow Jones pull back as low as 10300. A move below 10300 could send the Dow Jones back towards its 200 day MA around 10100, and a break below this level would be very very bearish, however I think this is very unlikely. With all that being said I think the Dow Jones could have a correction of around -7%. Another important secondary chart which is important to monitor is the Stochastic which as the Dow Jones moved higher we saw the Stochastic trend between approximately 75 and 95 despite giving minor SELL SIGNALS along the way. If the Stochastic does fall sharply lower below 75, I think this will be just another affirmation that we are in a correction. As things stand right now, we are getting SELL SIGNALS and we await to see if we can get a confirmation in the upcoming trading sessions. Right now I strongly advise to not take any long positions as many people may mistakenly see today's big down move as a buying opportunity. This could be true if the Dow Jones bounces back strongly higher from here, however it would be foolish and too risky to take long positions today. If the Dow Jones does continue lower as I expect it to do, you should consider exiting your long positions if you haven't already and move towards taking short positions.

AIG - Trending Up

AIG - HOLD


AIG has been trading in a major up trend above its 20 day MA since the beginning of March and its 50 day MA recently crossed above its 200 day MA which is a bullish sign. However, AIG is one of the most volatile stocks I know of and a pullback towards its 20 day MA (around $38.50) is imminent. Despite still trending in a major up trend, AIG's pullbacks are significant and if it were to begin on Monday could lose about 13% of its vale before bouncing back up. That's why in the case of AIG it's always safer to take a long position near a support level for which it recently bounced back up from. Keep in mind that AIG could continue strongly higher from here, however it's hard to predict when the pullback will start, but you can expect it to be brutal. Given the fact that volume has been trending down during the past trading sessions while the price moved up may be a hint that AIG will be pulling back soon. If you are already long AIG, you want to HOLD on to it as long as it continues moving higher. Based on the current price of $44 that would be immediately followed by a pullback, I would be aiming to get long around $38.50 to $40 depending on whether or not AIG continues higher in the upcoming trading sessions.

MPEL - Jumping back up

MPEL - BUY SIGNAL

After seeing a doji candlestick yesterday which is the first sign of a reversal and a potential bottom, MPEL jumped back up strongly today over its 200 day MA today and thus gave us a BUY SIGNAL. MPEL and now appears to be resuming its major up trend after a pullback during the last couple of trading sessions. MPEL's stochastic is also about to give us a BUY SIGNAL. Looking at the chart and MPEL's trend since the month of March, I think it is very likely of seeing MPEL get near $6.00 before the next pullback. To confirm this BUY SIGNAL we want to see MPEL remain above its 200 day MA tomorrow and preferably hitting a higher high or closing higher.

Dow Jones - Where is it heading next?

Dow Jones - WAIT

After exactly hitting its weekly 200 day MA around 11150, the Dow Jones pulled back sharply. The weekly 200 day MA is a critical resistance level which when it will be broken will trigger a STRONG BUY SIGNAL. Right now it's hard to say if the Dow Jones will bounce back up higher next week or experience perhaps a small correction. When we look at the daily chart, we can see that the Dow Jones' major up trend is still intact above its 20 day MA (middle green dashed lines). The daily 20 day MA currently stands around 10950. The question for next week is whether or not the Dow Jones will manage to hold above this level (20 day MA). A bounce back up the daily 20 day MA will have the Dow Jones resume its major up trend and we could then perhaps see it break above its weekly 200 day MA. However, given the fact that the weekly 200 day MA is such a strong resistance level to break above, I believe that there are good chances of seeing the Dow Jones break its daily 20 day MA next week or the week after, and therefore trigger a STRONG SELL SIGNAL. If this occurs I do believe we should have a small correction towards the following support levels: 10750, 10500, 10300, 10100, 9900-10000. If the Dow Jones falls below its daily 50 day MA (currently around 10600) there will be a potential of seeing the Dow Jones move down towards its daily 200 day MA currently standing around 10000. We should have a better idea where the Dow Jones may be heading next, next week, and because we are at a level of uncertainty I have issued a WAIT signal.

Weekly Chart

Daily Chart

MGM - Quick Update

Does MGM's earnings preview that was just released change your price targets? Sell vs. Buy?

My price target of $18 to $22 does not change as long as the major up trend persists, meaning that MGM remains above its 20 day MA around $13.00. However, based on today's earnings preview and the reaction in the after-hours I sold all my position in MGM in the after-hours around $14.86, as I saw that my -8.00% trailing stop order was about to get triggered. After such a big and quick run by MGM during those past few days, we had to expect a pullback sooner rather than later. One warning that this pullback was coming is the fact that volume has been trending down during the past few trading sessions, and as you know you need to have a continued increase in volume for the price to continue higher. If the price continues higher while volume trends down, it usually is just a matter of time before we see a pullback, as is what it seems to be happening now with MGM. Right now, I expect MGM to pullback as low as around $13.10 towards its 20 day MA. The next support levels are at $14.50, $13.50, and around $13.10. I may decide to get back in MGM if it moves back towards its 20 day MA and bounces back up. If MGM were to fall below the 20 day MA this would trigger a SELL SIGNAL. Even if my target price is at $18 and $22, you cannot assume that once a pullback begins that it will not fall much lower than expected and maybe break the trend. As you know, when a stock trends up it usually does not go straight up and it will have pullbacks here and there but you never know if the trend will be broken on one of those pullbacks and that's why it's always safer to sell, especially if you have decent gains. Basically, what I'm doing is applying my Y-Swing strategy that you can read in one of my January posts. Right now I will not issue any signal, but assuming MGM does close around or below the prices that it traded during the after-hours, we should have a SELL SIGNAL. Keep in mind that if MGM were to pullback in just one day towards its 20 day MA around $13.10, we would have a WAIT signal to see if MGM manages to bounce back up. I personally think MGM will pullback towards $13.10-$13.50 for the next couple of days before bouncing back up. If it does manage to bounce back up, I think it will just be another opportunity to get in again. For my part, by applying my Y-Swing trading strategy I will not tolerate a swing loss of of more than -8.00% and that's why I sold all my position, cashing an average gain of around 25.00%.

MGM - Finally shoots up above $13.00

MGM - STRONG BUY SIGNAL



On March 14th, I indicated that MGM could possibly be jumping above $13.00 in the upcoming weeks and today this prediction has come true. On March 5th, MGM started a major up trend above its 20 day MA. MGM's biggest challenge would be to break above the $12.80 and $13.00 resistance levels that were both broken today and now triggered a STRONG BUY SIGNAL. Just 3 weeks ago I also indicated that there was a weekly ascending triangle pattern which was also confirmed about 2 weeks ago. With a close above $13.00 MGM should manage to easily move up towards its critical resistance level around $14.25, and if this level is broken expect MGM to move towards $18.00 and $22.00. MGM ended the day with a volume of around 38.51M which is 86% higher volume than the 20.70M average. This is very significant and necessary to see MGM continue higher after breaking the $13.00 major resistance level. MGM's new support level is now $13.00 and this should be confirmed in the event of a pullback which would see MGM bounce back up after hitting $13.00 again. MGM's daily Stochastic and MACD both triggered a BUY SIGNAL today. I wouldn't be surprised to see MGM have a little breakout tomorrow and open around $13.50 to $13.80. If that does happen we just have to hope that it can close around the highs of the day or we may get a SELL SIGNAL if we get a shooting star top pattern. If we do see such pattern after MGM trades much higher, we could see pullback back towards $13.00 and if it holds up then it will be very bullish and a re-affirmation that $13.00 is now the new support level.


LONG MGM

MGM - Strong Reversal

MGM - BUY

After pulling back as low as $11.36 today at its 50 day MA, MGM strongly bounced back up to trigger a BUY SIGNAL as it recovered all of the past days' losses. MGM closed higher today at $12.52 on strong volume and has now formed a Bullish 3 Method Formation which is a continuation pattern of the current up trend.

"The psychology behind this pattern is relatively simple. The first candle represents strong impulsive buying with high volume. The consolidation bars do not show any real selling but conversely allow longs to buy more of their positions while the stock drifts lower. Finally, when the longs are done accumulating their shares, the downward pressure is released and the stock is allowed to go higher, above the first candles high." (source: http://www.mysmp.com/technical-analysis/rising-and-falling-three-methods.html).

"The Rising Three Methods bullish continuation pattern occurs in a bull market, where during an uptrend the market rests before resuming the trend. The bullish trends break is reflected by small candles that all stick to a strict market range formed by the aggressive move on day one. A typical explanation for this type of formation might that the market is slowly digesting the relatively large moved reflected by day one." (source: http://www.fxwords.com/b/bullish-rising-three-methods-candlestick.html).

"Bullish rising three methods pattern is considered as a highly reliable trend continuation pattern. Reliability of the pattern increases with shortening of real-bodies (doji formations) of middle candlesticks and decrease in trading volumes of middle days." (source: http://www.nobletrading.com/blogs/2009/01/bullish-rising-three-methods-pattern.html).

I now feel very optimistic of seeing MGM finally going over $13.00 this week and perhaps as early as tomorrow. I feel a breakout on the up side for MGM is now imminent. As mentioned in earlier posts, a closing above $13.00 will trigger a STRONG BUY SIGNAL at which time we may see it move towards $17.00 and $22.00.



LONG MGM

MGM - Shooting Star Top Pattern

MGM - SELL SIGNAL

Today MGM moved as high as $12.67 before pulling back down and closing slightly down at $12.26. As a result of this we got a minor SELL SIGNAL as we can now observe a shooting star top pattern which indicates that MGM should continue pulling back lower tomorrow. MGM gave up all its gains today and closed down below its opening price which is always a bearish signal. Keep in mind that MGM's major trend is still up and will remain so as long as it trades within its up trending channel. Going into the next couple of days MGM is looking to move back towards $12.00 and perhaps as low as $11.65. What is important for MGM is to remain above these levels to maintain the up trend. I personally sold my position today at $12.26 cashing in a minor gain and I am looking to get back in perhaps tomorrow or the day after around the levels I mentioned. I personally chose to take the safe path with MGM as it is a very volatile stock. Before getting back in I want to wait and see if MGM manages to bounce back up from one of these level ($12.00 or $11.65). One possible scenario is seeing MGM move back lower towards these levels to then bounce back up and close higher. Although unlikely for tomorrow, they may even be a minor chance of seeing MGM close higher after hitting lower lows. If MGM breaks the $12.00 support level tomorrow I will be looking to getting in close to $11.65, only if it bounces back up first. Some people may ask that if MGM is still in a major up trend why should you not just hold MGM into tomorrow or the upcoming days? The answer is simple, there is no way to know if the shooting star pattern indicates a top for the major up trend or the recent 2 day minor up trend. MGM could break below $11.65 and then the door will be opened to move back towards its 50 day MA around $11.31 and even towards $10.00-$10.50 if it breaks the 50 day MA. If MGM manages to stay above $11.65 and $12.00, I believe this pullback may not last more than 1 or 2 days before MGM bounces back up. In the event where this shooting star SELL SIGNAL were to fail tomorrow and that MGM would just jump higher without hitting lower lows, I would wait and see if it manages to break $13.00 before getting back in. Like I mentioned in my previous posts if MGM jumps above $13.00 and closes above this level this would trigger a STRONG BUY SIGNAL. Right now what I expect to see happen, which is the most likely scenario is seeing MGM pullback as low as $11.65 or $12.00 to then resume the up trend and move closer again to $13.00 in the following days where the ultimate test will be.

MGM - Breaking through Resistance

MGM - BUY


After reversing back down yesterday to almost exactly its daily 50 day MA ($11.19) MGM managed to bounce back up and close at $11.38 yesterday. This was a bullish sign despite a failed SELL SIGNAL that was triggered by the Stochastic yesterday. Today, MGM moved back strongly higher and broke the $12.00 resistance level by closing near the highs of the day at $12.30 (+8.08%). The continuation of the current up trend is promising as MGM moved up today on stronger than average volume which is required for MGM to continue moving higher. Those who took a long position with MGM after seeing it bounce back up its 50 day MA are in comfortable position. MGM is now trading in an up trending channel indicated by the two blue parallel lines on the chart. For those who may want to get into MGM at this point, I would suggest that you WAIT and see what happens tomorrow. There are several possible scenarios:

1) WAIT: MGM continues higher towards $12.50, $12.75, or $13.00. If MGM breaks $12.50 it should manage to move towards $12.75 and $13.00. Buying around these levels would be too risky due to the very strong resistance level at $12.75-$13.00. If that occurs I would rather WAIT and see if MGM manages to break above $13.00. If you were to take a long position before that happens, there will be too much risk of seeing MGM reverse back down.

2) STRONG BUY SIGNAL: MGM breaks above $13.00. If that happens, this would trigger a STRONG BUY SIGNAL for which there would be a strong potential for MGM to continue to shoot up higher towards the $22.00 target price as I indicated in my last post. Please note that for a STRONG BUY SIGNAL to be confirmed it is preferable to see if MGM can manage to stay above $13.00 for a day or two, and then take a long position. However, MGM being such a volatile stock with a high beta may make you lose a lot of up side if the STRONG BUY SIGNAL is confirmed. With that being said if MGM breaks above $13.00 and you believe that it will manage to close above this level on that day, you should take a long position then.

3) BUY SIGNAL: MGM pulls back towards $12.00 and bounces back up. If this occurs this will be a confirmation that the previous $12.00 resistance level is now a support level. If this happens tomorrow, taking a long position will be considered a safer bet. Even if you end up buying around the same price as you can buy it now, this would be an indication that there is less chance of seeing the $12.00 level broken any time soon, and MGM may indeed continue higher.

4) WAIT: MGM moves back down and closes below $12.00. If that happens, this doesn't mean MGM will necessarily start trending down, but simply that you may be able to get in at a cheaper price. If that occurs MGM closes support level is around $11.60-$11.70, and a bounce back up from this level in the following day or two could be a good entry point.

5) HOLD: MGM breaks below $11.60. If that occurs MGM could be heading back towards its 50 day MA which is currently around $11.25. However, at this point taking a long position with MGM wouldn't be very interesting as it may start trading sideways for a while.

6) STRONG SELL SIGNAL: MGM breaks below its 50 day MA. If that happens, this will trigger a STRONG SELL SIGNAL as the ascending triangle pattern will be considered to have failed as MGM would very likely head back towards $10.50-$10.00.

Among these scenarios, the most likely ones to occur are scenarios 1, 2, and 3. Right now, MGM is looking bullish but keep in mind that this is a high beta (high risk) stock as things can change very quickly in a matter of days. This is a stock that has to be monitored carefully.

LONG MGM

MGM - Possibly jumping above $13.00 in the upcoming weeks?

MGM - BUY

MGM gave us a BUY SIGNAL when broke its down trend on Friday March 5th by moving above $11.15 and its 50 day MA. The upper Bollinger Band has since started trending higher. MGM has now been trading up in a narrow channel for the past 2-3 weeks. However, MGM's Stochastic is in overbought territory at 90.47. This could indicate that we may soon have a little pullback, but if this happens it shouldn't go back lower than its 50 day MA. Obviously if it were to break back down the 50 day MA this would trigger a SELL SIGNAL. Right now MGM looks bullish as it broke its major down trend which had been intact for the past 2-3 months. MGM could move higher in the upcoming days but the real challenge will be going through the very strong resistance levels of around $12.75-$13.00. MGM hasn't managed to move back above $13.00 in the past 3-4 occasions since it fell below it in November 2008. The day MGM manages to move sharply above $13.00 is when we will have a STRONG BUY SIGNAL.


By looking at the weekly chart we can see that MGM has been trading in a major sideways trend since May of 2009. However, what is the most interesting it that this sideways trend has been narrowing more and more, and MGM now looks to have formed a ascending triangle pattern which started in March 2009. I believe that we are now getting closer and closer to a break, most likely above $13.00 which would confirm this ascending triangle pattern. According to investopedia.com: "An ascending triangle is generally considered to be a continuation pattern, meaning that it is usually found amid a period of consolidation within an uptrend. Once the breakout occurs, buyers will aggressively send the price of the asset higher, usually on high volume. The most common price target is generally set to be equal to the entry price plus the vertical height of the triangle." With that in mind, to calculate the price target in the event of a breakout, we can see that MGM started this pattern around the $4.00 price level and therefore this would give us a price target of around $22.00 ($13.00-$4.00= +$9.00; $13.00+$9.00= $22.00). The $22.00 level coincides with the closest and most significant resistance level after $13.00. MGM's weekly stochastic has also given us a BUY SIGNAL. Overall MGM looks bullish and appears like it could break $13.00 in the upcoming weeks. Based on the daily chart we could see a little pullback this week, but as long as MGM stays above its daily 50 day MA this would give the chance for MGM to eventually move back above $13.00. Obviously, some patterns fail and if MGM were to break below this up trending support line and move below $10.00, this could trigger a sell off which could send MGM much lower. However, until that happens MGM's chart will remain bullish. The current pattern looks very promising, and historically ascending triangles more often break up than down. For traders looking to get into MGM based on the ascending triangle pattern alone, it is usually preferable to wait and see for a break up above $13.00 before getting in, as there is obviously always a risk of seeing this pattern fail.


LONG MGM

FL - Trades above its Weekly 200 day MA for the First Time in Over 2 Years

FL - BUY SIGNAL

After trading sideways between $9.00 and $12.00 for roughly a year, FL has started to make a strong move up about 3 weeks ago when it broke through its key resistance of around $12.00. FL has also been experiencing relatively higher than average volume which is required for this trend up to continue. Despite having a BUY SIGNAL since 3 weeks ago, I decided to take a long position with FL on Friday after getting a BUY SIGNAL from the daily Stochastic which also shows that FL has relatively still some space to move before pulling back. The daily stochastic currently stands around 70 which is still below the overbought territory of 80 and up. The 20 day MA which is depicted by the dashed line of the Bollinger Band is currently FL's strongest support level. FL has managed to stay above its 20 day MA ever since it broke through it 3 weeks agos. Another bullsh sign for FL, is the fact that it managed to close at the highs of the day.


When we look at the weekly chart we can see that FL has broken up above its 200 day MA for the first time since July 2007 when it broke below it. This is very significant as FL has been trending down for the past 2-3 years, and only now are we starting to see the trend shift. The challenge however is to see whether or not FL can maintain its position above its weekly 200 day MA by the end of next week. Another challenge is the fact that the weekly Stochastic is in very overbought territory at 96. However, this doesn't necessarily mean FL will be moving back down very soon, as I have seen stocks continue moving higher while the Stochastic stayed and continued to trend around the overbought level. Keep in mind that stocks that usually trend in the overbought level (e.g. between 60 and 100) is a sign of strenght and usually means the stock is trending up. This has not been the case for FL as it been trending between oversold and overbought territory for the past 2-3 years. Another positive sign for FL is the fact that the upper Bollinger Band has started to trend up, while the lower Band should soon follow if the trend up continues. Finally, I believe that if FL can manage to either stay above its weekly 200 day MA or move even higher by the end of next week, FL would have strong potential to go as high as around $17.00 where its next significant resistance level stands. Aside from this $17.00 level there is very little reistance in FL's way to prevent it from reaching it, and the daily Stochastic's low level leads me to believe that it could reach this price soon. A break above $17.00 could eventually send FL towards $20.00. However, I would first expect a pullback around $17.00 followed perhaps by a sideways trend before it can reach the $20.00 level. FL had first given us a BUY SIGNAL 3 weeks ago after breaking above the $12.00 resistance level, and on Friday we were given a 2nd BUY SIGNAL by the daily Stochastic as well as by seeing FL break through its weekly 200 day MA.


LONG FL

F - Dark Cloud

F - SELL SIGNAL


Although F has been in a major up trend since early November, F has given us a minor SELL SIGNAL today with a dark cloud pattern. The current major up trend is still intact and will remain so as long as stays above its 50 day MA, however the dark cloud pattern does lead me to believe that F will shortly start pulling back as low as around $11.75, $11.45 and $11.15. Basically, what I'm saying is that I believe that there will be an opportunity to get in lower around these levels, once F bounces back up one of them, of course. The stochastic has also given us a SELL SIGNAL today, which strengthens the possibility of seeing a pullback. F is now a WAIT for a BUY SIGNAL. If you are long F, you may consider exiting your position now to perhaps get back in at a cheaper price if you wish to do so. I believe that there is a good chance F will break just below $12.00 tomorrow or Thursday. If F manages to close above today's high of $12.68 tomorrow, the dark cloud pattern will be considered to have failed.

HAS - Flag Pattern Confirmed?

HAS - BUY SIGNAL

As indicated last week, HAS was in a potential flag pattern which started breaking upwards today, and thus gave us a BUY SIGNAL. If HAS manages to maintain these gains above $36 and continue higher tomorrow, the flag pattern will be confirmed. If the pattern is confirmed, we could expect a price target as high as $40.00 before seeing the next pullback. The wide and upward trending bollinger bands does indicate that HAS has indeed space to move higher. HAS strongest resistance levels, currently stand at $38.00 and $40.00.


LONG HAS

HAS, ATI, TWX, SPLS, ADBE - 5 Bullish Stocks Looking to Move Higher

With the market looking to move higher, I decided to go through my watch list of nearly 200 stocks to find the stocks with the most potential to continue higher. Not only did I look for stocks with the most up side but also for the ones that had the least potential down side (meaning having the least chances of getting whipsawed with a -8.00% stop loss). After finding 20 interesting stocks, I finally broke down the list to a top 5. When selecting these stocks I took into consideration both the daily and weekly chart. I decided to ignore a few stocks that despite being in strong major up trends, are very low beta stocks which wouldn't provide a potentially strong return in the long term. In other cases, some stock's daily chart indicated strong up trends, while the weekly chart either showed a major down or sideways trend. I also decided to indicate the risk factor I considered each stock to be. This is based on if you were to take a long position at the current price. Each stock's risk factor is indicated as LOW, MEDIUM, or HIGH.

1 - HAS - BUY (RISK - LOW)

Looking first at HAS' daily chart there appears to be a potential flag pattern which would be confirmed with a break above $36.00. If the break out happens we would then have a price target up to around $40.00-$42.00. What adds strength to the potential flag confirmation is the common pattern of seeing the volume trend down during the flag formation. I consider HAS a low risk position at this point based on an -8.00% stop loss which would only get triggered below the current strong support levels at $35.00 and $33.50. Although the stochastic is in overbought territory it has given us a BUY SIGNAL.

Looking at the weekly chart, HAS is in a clear major up trend with the trend recently accelerated since the jump around $35.00. What was just 2-3 weeks ago the resistance level of the up trending channel, is now the new support level. The bollinger bands are also trending strongly higher, however it is possible for HAS to trade sideways for a little while before it can make another significant move up. Using Fibonacci Retracements, we can see now strong support around $33.00 with the potential of seeing HAS move back up towards $40.00 where its strongest resistance level stands.


2 - ATI - BUY SIGNAL (RISK - LOW)

After trading sideways for the past 4 weeks, ATI finally looks like it may start going back up. ATI started to break above the $46.00 resistance level, however it would be preferable to seeing it go towards $47.00 before jumping in. ATI has also broken back up its 50 day MA and has since continued to trend higher. ATI has good support at around $43.50 (50 day MA) and at $46.00 if it manages to remain above it this upcoming week. Last Friday's move up will influence the upper band of the Bollinger Band up which adds to the possibility of seeing ATI continue higher. The MACD has also given a BUY SIGNAL, however based on where the stochastic currently stands we may see just a minor move up before another pull back. Basically a move higher may happen more slowly than in the last minor up trend. This stock is considered LOW risk based on the fact that a move down of -8.00% would get triggered below the 50 day MA which would be enough to get a SELL SIGNAL.

Looking at the weekly chart ADBE does look like it may move higher towards $50.00 to $55.00. However, the major up trend is a broadening trend which most of the time breaks down. Based on the current price ADBE still looks like it has some good up side left in it. The ultimate test for the major trend would occur if ADBE reaches its 200 day MA. If it were to break above it, we would have a STRONG BUY SIGNAL, but a pull back from there could indicated the start of a major down trend. Despite all that, in the shorter term ADBE still looks interesting and definitely if it has the potential to get near its 200 day MA, meaning that it still has some good up side potentially left in it. The stochastic has also given us a BUY SIGNAL.


3 - TWX - HOLD (RISK - MEDIUM)

After trending strongly lower for nearly 4 months, TWX has finally broken its down trend after breaking above $28.50. TWX has since moved above its 50 day MA, whith the Bollinger Bands also starting to trend up. However, due to the pace at which TWX has been moving up and the fact that the stochastic now indicates TWX to be very overbought most likely means that the trend will be settling down sooner rather than later. A likely and preferable scenario is seeing TWX trending sideways while remaining above its 50 day MA before continuing higher. There is still some chance though that TWX may move even higher before that happens. The fact is that TWX is a HOLD as long as it remains above its 50 day MA. TWX is obviously very near its 50 day MA and an -8.00% move would be more than enough to confirm a failure of this recent BUY SIGNAL if it were to immediately move back down.


Looking at the weekly chart, we can see yet again that TWX has broken its major down trend. The next obstacle is going above the $30.00 resistance level. The next price target would then be towards $32.00 and $35.00, which if TWX manages to break would trigger a STRONG BUY SIGNAL. Due to the fact that TWX has broken back up its 50 day MA just recently and has relatively close resistance level to go through, TWX is considered a MEDIUM risk position at this point. The only reason I'm not considering TWX a HIGH risk is because it currently stands close to critical support levels which if broken, you shouldn't have to wait to incur a loss as high as -8.00% before concluding that the signal failed and that TWX may move back lower. I also consider TWX a MEDIUM risk due to the fact that the weekly stochastic has given us a BUY SIGNAL and started to trend higher while still being around oversold territory.


4 - SPLS - HOLD (RISK - HIGH)

SPLS has been moving strongly back higher in the past 2 weeks and now stands at a critical resistance level around $26.00. SPLS would give us a BUY SIGNAL if it can manage to break above $26.00. Due to the strong resistance and the fact that SPLS' stochastic is in very overbought territory, this stock is considered HIGH risk. It would be safer to WAIT and see if this resistance level is broken and maintained before getting in.


The weekly chart does show SPLS in a major up trend, but just like in the daily chart it has strong resistance to break through at $26.00. However, the stochastic has just given us a BUY SIGNAL while the MACD looks close to be giving us one.


5 - ADBE - WAIT (RISK - HIGH)

After trading down, then sideways, ADBE is now moving higher. ADBE has broken though the $33.50 resistance level while the lower Bollonger Band has started to trend higher along with the stochastic and the MACD which recently gave a BUY SIGNAL. However, the next major obstacle for ADBE is at its 50 day MA around $35.00, and until this level is broken ADBE is considered a HIGH risk position. There is relatively good chances of seeing ADBE move back to its 50 day MA, but whether it break up above it or not is impossible to say. However a move above the 50 day MA should send ADBE towards $38.00. If you are willing to take a HIGH risk risk, you could take a position at the current level and if it were to move to the 50 day MA and fall back down you could simply sell then. However, this doesn't mean ADBE can't just move back down from here. A sharp move back below $33.50 could send ADBE back toward $31.00, back in its sideways trend, or simply continue even lower.


Looking at the weekly chart, the obstacle to get back in the major uptrend is breaking back up above the 200 day MA around $35.00. However, although this is the safest play, last weeks candlestick does indicate a strong reversal, while the stochastic has given us a BUY SIGNAL while standing in very oversold territory.

Dow Jones - Heading Back Up?

Dow Jones - BUY SIGNAL

For the past few trading sessions, the Dow Jones has started to move back up: first of all we had a bullish hammer reversal pattern when the Dow Jones moved as low as around 9800 to only regain most of the losses and close just above 10000. The Dow Jones has since started to move higher by hitting higher lows and higher highs. Finally, on Thursday the Dow Jones broke through its minor down trend and is now trending in a minor upward channel. Today the daily MACD indicator gave us a BUY SIGNAL. Currently the Dow Jones stands at a critical level where it has strong resistance to go through at 10300 and at its 50 day MA just above around 10350. The ultimate test will be to see if the Dow Jones manages to break back up above its 50 day MA while maintaining its level above the 50 day MA. If that does happen we will have another BUY SIGNAL. In the short run if that BUY SIGNAL does occur, we could expect to see the Dow Jones move towards it upper Bollinger Band around 10500. Only if the Dow Jones manages to hit a new 52 week high above 10700 while maintaining the gains for a day or two will I issue a STRONG BUY SIGNAL. Right now, one strong possibility if the Dow Jones moves back up above its 50 day MA is seeing a major sideways trend. The reason for that is based on my observation for which the the upper Bollinger Band is now moving down while the lower Bollinger Band is moving up, which may indicate that the next short term trend may be sideways. Right now I would strongly consider starting to cover short positions, especially if the Dow Jones moves back up above its 50 day MA. Many stocks have started to break through their down trend today and gave us BUY SIGNALS. If the Dow Jones moves towards its 50 day MA and fails to move up above it sharply, we will have a SELL SIGNAL as this will add strength to the current major down trend. Looking at the weekly chart, the Dow Jones' MACD has yet to give us a BUY SIGNAL while the stochastic could give us one by the end of this week if the Dow Jones continues higher.

RIMM - At a Critical Level

RIMM - HOLD (Imminent STRONG BUY SIGNAL)

RIMM is currently in a minor up trending channel and stands at a critical resistance level. RIMM is currently around the level it broke down to after it had reported disappointing quarter results in October. RIMM is at a "make or break" level for which if it manages to move sharply over $72.50 we will have a STRONG BUY SIGNAL, but if it falls back down from here we may see it continue to trend within its major sideways trend between $55.00 and $72.50 (most likely $60 to $72.50 in the shorter term). Right now RIMM is a HOLD as long as it manages to continue trading within this minor up trending channel. One positive note is that the upper band of the Bollinger Bands has started to trend up which strengthens the possibility of seeing RIMM break this major sideways trend sooner rather than later. Keep in mind that if RIMM does manage to move sharply above $72.50, we want to see it maintain this level for about a day or two before considering taking a long position.

CGX - Still in a Major Up Trend Despite Turbulence

CGX - HOLD

CGX is one stock with a very particular chart right now. Since the month of November, CGX have been trading in a clean and clear up trending channel staying both above its 20 day MA (indicated by the Bollinger Bands - middle green line) and 50 day MA. In mid-January, CGX finally broke its channel's support line and traded below its 20 day MA. CGX came close to breaking its 50 day MA, but managed to strongly bounce back up to maintains its major up trend. However, what was once its support level is now resistance, which is is indicated by the middle sharp blue channel line. Despite the recent strong bounce up, there is now a warning sign as we can now observe a rising wedge pattern. There are currently two possible scenarios: 1) CGX jumps higher to break above the up trending resistance line to re-enter its up trending channel line, giving us a BUY SIGNAL. 2) CGX breaks sharply below the lower up trending blue support line, sending CGX at least towards $36.50 and $35.00. If the 2nd scenario occurs we will have a SELL SIGNAL out looking a minor down trend. However, the major up trend will remain intact as long as CGX remains above its 50 day MA. For, now CGX is a HOLD.

AGU - Stock Moving Up Despite Negative Market Momentum

AGU - BUY SIGNAL

I haven't been writing too many analysis lately, simply because the market in general is still trending in a major down trend. With that being said I feel very reluctant to giving BUY SIGNALS as most stocks are showing signs of weakness, trending down and giving SELL SIGNALS. However, I did decide to start looking for stocks today who are moving up or holding on to their current levels despite the market's weakness. One stock which has given us a BUY SIGNAL today is AGU, which crossed up over its 50 day MA today. The MACD, which I usually consider a very reliable indicator has also given us a BUY SIGNAL today. AGU is now actually trending up, while most other stocks in the market are either trading sideways or in a down trend. I still would be very careful before taking any long positions as the market is still trending down. However, if the market does continue lower, one stock you may expect to hold up or not lose too much ground is AGU. Remember that when a stock breaks over one of its moving averages, it is preferable to wait a day or two to see if the stock manages to hold up above it and not reverse back down. AGU's next resistance levels are around $64.30, $68.00, and $70.00.

Dow Jones - In a Major Down Trending Channel

DOW JONES - STRONG SELL

The Dow Jones has fallen once again sharply today, and erased all the week's gains. Like I had mentioned in my previous posts the momentum has shifted from positive to negative since breaking down below the 50 day MA around 10400. Despite seeing two consecutive days of big moves up, it only took one day to erase all the week's gains. The Dow Jones is now clearly trending in major down trending channel. Today, the Dow Jones even fell below the psychological 10000 support level. On a technical point of view there is not much support at 10000, and the closest support level right now is between 9800 and 9900. However, like I mentioned in my earlier posts I think the Dow Jones will head back at a minimum towards its 200 day MA around 9400. Other critical support levels are around 9100, 8600, 8100, and 6400. Before we can hope for any BUY SIGNAL the Dow Jones will have to break back up over its 50 day MA. For now we can expect to see the Dow Jones trend below its 50 day MA as it moves down. Basically we could see a similar pattern to the major up trend we had in 2009, only going in the opposite direction. Again opportunities are now more on the short side. You may see bounces back up here and there, but do not get fooled by these moves as long as the major down trend is intact; you never want to trade against the major trend. It is fair to expect to now see a more volatile market, similar to what we have seen in 2008. As long as the down trend persists, I believe up bounces will just be opportunities to short the market. For those who fear taking short positions and prefer to take long positions, you should look for stocks who are negatively correlated to the market. You have to be very careful when picking your stocks if you intend to take long positions, which I would advise against to. The best option for those who prefer not taking short positions is to simply stay on the sidelines, and cash in whatever long positions you still have, as they are most likely to go down along with the market in general. During uncertain times, it's always best to take a pause and wait for the market to stabilize.