SPX Long Term Channel SUPPORT!

This is a great picture of bounce behavior off of clear long term support.  I would use that red top line of this long term bull as the line in the sand for any thoughts of starting a short side swing trade; it is still a bull market until it isn't (although very mature and arguably stretched).  If a top is building, this has the potential shape of a diamond (very early visualization).

SPX long term bull channels:

Just a look at the long term bull channels for $SPX - have been an excellent swing long and short guide:

TNA Update

See previous TNA posts using the "posts by subject" links on the right.  In my previous post "TNA two sides", I showed a both potential symmetrical triangle and and head and shoulders.  Price failed the bottom line support / pivot of the symmetrical triangle potential, and came further down to the potential neckline of the head and shoulders.  Price found support at the 60 area and bounced.  The above chart shows the next potential pattern that led to a long at this 60 support - a rectangle.  Rectangles can be one of several things when they finally come to fruition - in this case, a double top, or a continuation rectangle; these point to obviously opposite reads, one bearish (dbl top) and one bullish (continuation rectangle).  Although indecisive in the long term at this point, the rectangle provided a clear low support line - I bought long there as the risk/reward is easy at the support.  If price breaks below as a double top, then the stop is only cents below the entry; if it is a continuation rectangle, then I could travel the coil in price all the way back up to top line and even a breakout beyond.  I am more skeptical of the original head and shoulders chart shown previously here, as this chart has developed to be far less that a good representation.  Time to put that possibility out of mind.  If a bear break comes, it will be off this potential double top (no longer a head and shoulders possibility).

This is a 10 min intraday chart showing good support of the long case - an inverse head and shoulders reversal pattern broken out at ~63.  The target here is 67 which as been a past pivot area.  At the absolute low here, price reversed back up above the larger rectangle support on an expanding volume bar - that was the automatic buy for a long scalp / swing.  Now this inverse head and shoulders subsequently formed and broke out showing behavior supporting the long - an add spot would have been the ~63 break up from this little pattern.

TNA Update

See previous TNA post (can use "posts by subjet" at the right side here).  I closed the previous short form 76 at the 67 support / pivot area that is the bottom of this potential, building sym triangle.  The short term, intraday charts (see 5 min, even 2 min) showed both a possible inverse head and shoulder and a rounding bottom looking formation at this bottom line, so these were the clue to turn long at this line yesterday in expectation of the next coiling up in price - towards the top line resistance of this triangle.  Looking for ~77 area.

GPRO payoff

See previous GPRO premise post (use the "post by subject" section in the right column to see historical posts by subject) - this is the payoff and a good example of what a measured bull move / bull flag looks like when it works.  Looking for target that corresponds with the top of this channel around 82 area.  Note the expanding volume on the breakout from the rest period - this is a key confirming requirement for this pattern.

GPRO Long

One bright spot in the current weaker market is GPRO.  This 60 min chart from the ipo shows steady basing followed by a lift in price that is now resting.  It did not show any weakness in an otherwise strained market.

Currently  it is shown here in an early potential channel - "early" because it is only defined by minimal touches, and price can easily move beyond the current shown trendlines widening out this channel (early channels' support and resistance lines should not be relied on as price often moves beyond them and forces the channel to morph).

GPRO is resting in a declining volume, slightly descending counter move off of the uptrend out of the preceding base. This is classic bull flag / measured bull move behavior and points to continuation up in this trend; potentially to 80 area pricing.

YELP Short

The first chart is YELP daily showing a rising wedge in a downtrend (from the top).  The original short entry last week was based on this bearish continuation pattern that did break to the downside today.  Target is 50/55 area.

The second chart is a weekly showing a potential diamond top.  We can see that the wedge forms the second half of this pattern.  This also targets the 50/55 area, conservatively; a more aggressive target can be justified at 30, but that is getting way ahead of price at this point.

As always, targets are just the immediate suggestion of direction, never totally assured, and price action must be the guide first and foremost (ahead of any expected targets).

TNA two sides

Daily chart of TNA drawn two ways, showing two different longer term outlooks (but tradable in the shorter term).  First is a potential complex head and shoulders top pattern ("complex" because of the twin peak head portion).  First low support in this scenario is the neckline in the low 60s.  

Second is a possible coiling symmetrical triangle pattern.  This is an almost picture perfect one with smart, even coiling action between support and resistance lines.  Next support is 65/67 area, dependent on time.

I personally give some more weight to the sym tri for subjective reasons:

The pattern is perfect, and it is hiding in plain sight as many traders are currently strongly weighting / seeing bearish patterns.  But the sym tri is more likely a continuation pattern in this uptrend once it is mature and ready to breakout.  This should happen at 75 - 80% of pattern completion visually - which means likely one more bottom line support touch at the 65-67 area. Also, this would be perfect timing for it to turn up in Oct to end of year which is in line with an end of year seasonal rally.   

Always remember - sym tri bias is continuation of previous trend, but also can break out either way regardless of trend many times.

I currently have a short sale from 76 on TNA.  It seems, regardless of the longer term bullish potential that could come, price should see the bottom line of the sym tri first (where I could close the short for a good ~15% swing).  Or, if the head and shoulders is operative and the sym tri breaks to the downside, then the position could hold for larger gains.  Shorter time frame intraday behavior to come should inform which might occur.

UVXY long premise

UVXY long from 23.8; here is why - The top chart is a daily showing the potential double bottom; this points to a possible climb back to 39/40 top line resistance, and then a potential breakout up from that if it works as a double bottom with a target at 55.  The bottom chart is zoomed in, 60 minute bars showing this second bottom is rounding (a bullish turnaround pattern).  If a rounding bottom, it provides evidence price is working towards that higher resistance line.  Resistance / breakout for this rounding bottom portion of the behavior is the green line at 27; target is 31/32.  Multiple patterns of behavior pointing to the same thing is always desired.

QQQ Context

This is the QQQ (nasdaq etf) 20 yr, monthly chart.  Price is up out of the top line resistance of the first bull channel from 2009.  The second bull channel from 2011 is seeing resistance right at the top line (also around the 100 century mark).  Note the red horizontal line at that 100 level; where the previous dot com boom of 2000 saw its collapse after a blow off top.

Now, price can climb right up the 2011 bull channel top line resistance line for more upside, but this context is ripe for a pullback rest or more.  One could easily visualize a potential cup and handle here meaning a weak 2015.  If a pullback does come soon, look for 80 support (bottom line of the 2009 channel) as a possibility.  Basically, this looks like limited reward to the upside if trading long; and a potential larger top or pullback play for shorts.  When that pullback comes is the question - after another blow off over 100 or have we seen the high?

One thing that is supportive of shorts - look at the massively declining volume pattern during this whole bull run after the 2008 lows.  When volume returns or expands, odds are it won't be upside buying, but rather sellers could drive volume expansion in the future.

Welcome

This is a place for me to share more expanded chart reviews and premises.  As always, they are just an attempt to understand and get in front of pricing behavior for actionable trades.   The market does not care what these premises suggest; because of this reality, stops and unemotional, nimble reactions to market movements are also required.  Everything posted here is for educational purposes and not explicit or implicit actionable advice - each is on his or her own in that regard.  Always protect your risk/reward and capital inventory.  Posts here are in contemporary order and will pile up;  It is a good idea to use the navigation "posts by subject" on the right side column to isolate a specific issue and all of its historical posts to see premise progression, success or failure, over time.

This blog is not meant to follow every move in real time, but more to post the larger premises and good examples of chart pattern following.  For more real time reactions and short term chart discussion, follow me on Twitter with the link at the top right column.

Educational links:
http://thepatternsite.com (the "Chart Patterns" link is of special importance)
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns
http://www.recognia.com/sites/default/files/GuideToClassicChartPatterns.pdf