AKS And SPX

AKS Doubled Topped at yesterday's open, at 16.15. On the early morning selloff, it Double Bottomed at the 15.42 gap from last Wednesday. When the SPX recovered off its morning low, looking like it was going to make a bid for the the broken neckline of its H&S Top, at 893.435, I got long AKS.

Retests of broken support, like this neckline of the putative H&S Top in the SPX, are common and are to be expected. But, on a retest, former support "should be" resistance. If it isn't resistance, that puts the validity of the pattern/breakdown in question.

When we got to the neckline on a quick jump in the SPX around 11:30AM, I took profits on AKS and went long the SDS, expecting SPX 893-894-ish to be important resistance.

One of the catalysts for the rally, if not THE catalyst for the rally, was Meredith Whitney's upgrade of Goldman, but she said that her call on the general market was bearish. That kind of call often sparks a rally, as it did yesterday, but resistance (the 893 neckline) "should be" resistance, regardless of any call like Whitney's.

As we traded in the little Symmetrical Triangle (in yellow), it looked to me like the market was holding up very well in the SPX 893 resistance area, and that it "could be" a bullish continuation pattern, following the Ascending Triangle breakout (pattern in white). I hadn't given the Ascending Triangle bullish breakout as much credence as I did the SPX 893 neckline in the daily chart, but there was very little give back of the rally to SPX 893, which I didn't like at all, so I gave the Ascending Triangle bullish breakout a lot more credence than I had, initially.

"When in doubt, get out." I threw in my SDS long position just ahead of the upside breakout of the Symmetrical Triangle (pattern in yellow).

Gain on AKS: $800. Gain on SDS: $300. Gain on the session: $1,100.