SPX, IBM, And PCU

From yesterday morning on the SPX:

"Again, the current chart of the SPX is bullish "until it ain't." LOL. I just wanted to discuss the kinds of things that we would look for that would tell us that "it ain't."

We sure didn't see anything yesterday that would indicate that "it ain't." The Bulls came with their "A" game. They gave up only a couple of points at the open, held it above the neckline, then took it higher. The Bullish Engulfing candle engulfed the prior four days' "real bodies," which are defined by the open and closes of those candles.

As the chart stands, it looks like the missing Data Point #4 already was in, at the May 21 low of 879.61. The upward slope of Trendline #2-#4 is 0.24249, which came in yesterday at 880.095. The low on the session was 881.46, a point above that trendline, so that's a successful retest and the retests of the 877-875 neckline of the Bullsih Inverse H&S pattern also have been successful, thus far.

The top of this putative Symmetrical Triangle (pattern in black) comes in today, May 27, at 821.815, so a print of 821.82 would be a technical breakout of the pattern. Since yesterday was such a strong day, I'd like to see some give back, then a breakout, but I don't get to call the market ;)

AAPL got an upgrade yesterday morning out of Morgan Stanley and was indicated to gap up about two dollars. IBM, however, was called down at the open from Friday's 101.89 close. My plan was to buy IBM if it could recover to UNCH from the gap down. It put in a low of 101.02 and recovered to UNCH in only a few minutes, so I bought it there.

The next part of my plan was to sell it when it was up a dollar, just below resistance in the $103's, and try to reposition on a pullback toward UNCH. The darned thing went up a dollar very quickly, but never pulled back. IBM blew right threw that resistance and was strong all day. It put in a nice candle on the session.

IBM recently fell out of a rising channel, and failed a retest at the bottom of the channel on a Bearish Engulfing pattern. Not so hot. But, it came roaring back on yesterday's strong Bullish Engulfing candle, and now is at the top of a Symmetrical Triangle (pattern in purple) champing at the bit for an upside breakout, which would occur today, May 27, on a print of 105.78.

There are a number of things that I like about the chart of Southern Peru Copper, PCU:

1. The 34/55RSIs gave TWO "buy pivot" signals when Data Point #4 got put in.

2. The May 20 rally to the top of the Symmetrical Triangle failed by about four cents. That was a trendline validation, telling us, "Yep, that's resistance alright!" When validated trendlines get taken out, that tends to have some significance because Ms. Market then is telling us, "Nope, that isn't resistance any longer."

3. On the pullback from validated resistance, PCU put in lows of 19.04 and 19.01, right near the two "Buy Pivots" of 19.03 and 19.10, so that area is support, so far.

4. That support also is at the top of the Kumo (Cloud), represented by the vertical lines in this Ichimoku Kinko Hyo chart. We can "See At A Glance...The Table Of Balance" that the stock is bullishly positioned.

5. The pullback from validated resistance also gave the stock a chance for form a "nested" Bullish Falling Wedge (the pattern in blue), the top of which came in yesterday at 20.015. The close was 20.02, so that's a technical breakout of that pattern, by a ha' penny.

6. The MACD has come back toward its zero line, has put in a bullish divergence, and just missed making a Bullish Cross of its signal line yesterday, by a hair: 0.0065.

The top of the Symmetrical Triangle (pattern in purple) comes in today at 20.4809, so a print of 20.49 would be a technical breakout of the pattern, as well as a breakout above validated resistance. We then would want to see the 20.78 high of Blue Data Point #1 get taken out for a "higher high."


Gain: $1,050