GOOG And FCX

This is the chart of GOOG as of Wednesday's close, prior to it being called Gap Up at yesterday's open, to 536.00, which was Gap support that The Bears broke in Wednesday's session.

"Broken support 'should be' resistance on any retest," so that opening indication at 536.00 looked marked for a Gap And Crap opening, especially since The Bears had smacked GOOG back out of the Channel in the daily chart after "Ye Olde Knuckle-biter" on Tuesday. However, two factors kept me from shorting the Gap Up opening in GOOG:

(1) In the middle of the chart, 527.87 was the pivot high of a "W"-Bottom, or Double Bottom (synonymous), the upside takeout of which took GOOG up to 547.00. At Wednesday's low of 527.70, "former resistance at 527.87 became support." The Bulls stood their ground and closed GOOG slightly above it.

(2) Not only had The Bulls stood their ground at expected support, they were breaking out of a Channel (the white arrow) at the open, so it 'could be' a Gap And Go opening.

Since the daily chart usually trumps the intraday chart, the case for The Bears looked stronger since they had smacked GOOG out of the Channel, so they had to be favored to defend 536.00, but I had some doubts.

Hmm-m-m...what to do...what to do...

I decided "when in doubt...stay out." I passed on shorting the Gap Up opening.



RESULT: It was a Gap and Crap opening (red arrow). Curses! LOL.



But, The Bulls still might not be finished. Beginning at the September 20 high of 558.52 (Blue #4), that data point also is Black #1 for a "possible" Symmetrical Triangle. The top of it comes in today, September 30, at 540.138. If The Bulls can break out of it, though, they've got to deal with the bottom of the broken Channel, which comes in today just above there, at 540.85, so an upside Symmetrical Triangle breakout wouldn't look quite believable, but we know how deceptive Ms. Market can be ;)

The Bears need to take out Black trendline #2-#4 and get moving on the downside, or The Bulls could turn it around. That trendline comes in today at 521.463.




At yesterday's 30.64 low, the 2011 Falling Wedge target of 30.61 that went IN PLAY on the August 5 breakdown below 46.00 got MADE, within three pennies.

That doesn't mean that FCX can't or won't go lower. It only tells us that the downside expectation from that particular pattern breakdown has been achieved.

Market lesson: "When analysts are calling for higher targets, but we see a chart breakdown, be ver-ry careful, despite low price earnings ratios and despite how cheap the stock looks. Cheap can get a lot cheaper."

GOOG: Bearish Pattern Breakdowns

From yesterday on GOOG:

"Often, those moves back inside a broken pattern are just a "One Day Wonder" and The Bears end up knocking it outta there, but they are uncomfortable for The Bears when they occur."

The Bears got it done, but there was a little more discomfort for them in the early going, as The Bulls took GOOG higher with a Gap Up, and higher still in what turned out to be a Bearish Rising Wedge move (pattern in white) to a top at the Head of a H&S pattern (pattern in yellow).

I liked the neckline breakdown on the long red candle (horizontal arrow) and wanted to short any retest of the broken neckline, or any attempt to get through the bearishly inverted EMAs (yellow down arrows).



In the 5-Minute chart, The Bulls were holding at the gap (horizontal white line), so since a rally to the EMAs (white down arrow) seemed to be in the offing, I decided to get long 500 shares of GOOG at 536.85 for a quick rally to 539.00 - 540.00 EMA/H&S Top resistance, then reverse and go short.



The Bulls managed to break out of this Ascending Triangle and get to 539.00, but The Bears sent them back inside the triangle for "Ye Olde Knuckle-biter." I wasn't interested in a knuckle chew, especially since I was wanting to get short, so I threw it in at 537.50 for a $300 gain and planned to short any further rally, or a breakdown of 536.00 gap support (horizontal white line in the chart above).



The Bulls did have another rally in them, to 539.53 at the top of a Rising Channel and the bearishly inverted EMAs. On the heels of the broken H&S Top earlier in the session , the Rising Channel "should be" a bearish continuation pattern and resolve to the downside. I shorted 500 shares of GOOG at 538.75 on that rally (white arrow).



The Bears morphed the Bulls' Rising Channel (in white) into another H&S Top (in yellow), then broke it to the downside. Lovely. Notice the failures at the bearishly inverted EMAs (three yellow down arrows). Lovely.

What wasn't lovely at this point in trading (1:00PM) was that The Bears had allowed The Bulls back inside the broken H&S Top pattern on the broken neckline retest, for a "Ye Olde Knuckle-biter," leaving me wondering if The Bears ever were going to get it done on the downside. UGH. I lowered my mental stop to "cover an upside takeout of the high of The Right Shoulder," which at least would give me a small gain if I got taken out.

Get it done, Bears, dang it! LOL.




FINALLY!!!

The Bears rejected The Bulls' bid to get through the second H&S Top and also knocked out 536.00 Gap Support. That put the 532.93 top of the Gap from September 26 IN PLAY, where I planned to cover my short in case of 536.00 retest rally.



GOOG has a wide spread between the BID and ASK, so I covered at 533.25, allowing for some wiggle room and for the possibility that the gap wouldn't get entirely filled prior to a possible retest of 536.00. As we can see, though, the gap did get filled completely.



I took a much needed nap after I covered so I didn't get to see if the Bulls would be able to retest broken 536.00 support, but they did. The Bulls rallied to 535.88 in another rising Channel (the second one in yellow), then The Bears took over and spanked The Bulls into the close.



Advantage: The Bears



Gain on the session: $3,050

AMZN And GOOG: Gap Up Openings

From yesterday on GOOG:

"Anything above the bottom trendline, at 537.28 for today, is "Ye Olde Knuckle-biter" for The Bears because the stock would be back inside the broken pattern and The Bears "shouldn't" allow that, other than for an intraday gap fill, but then they would need to smack it outta there."

This chart of AMZN is the type of thing to which I was referring yesterday morning. AMZN opened Gap Up, but it was a Gap And Crap opening, and The Bears immediately smacked it for a loss of $12.

The GOOG Bears didn't show up until late in the session, and it was a poor showing at that.



GOOG opened on a Gap Up, but it was a Gap And Go instead of the Gap And Crap that AMZN experienced. After a brief pullback, GOOG rallied to a new morning high of 542.83, well inside the broken Channel in the daily chart.

GOOG pulled back again from 542.83 and The Bulls hunkered down, formed a Bullish Falling Wedge, then broke out of it to the upside, suggesting a retest of the 542.83 high, and possibly higher.

I shorted 500 shares of GOOG in the 542.60's, playing it for a Double Top.



Nope! NOT a Double Top. Curses!

My entry short was at the first white arrow, and I got squeezed immediately. I didn't cover my short because GOOG already had rallied above the stacked resistance that we discussed on Monday morning, and it now was rallying farther into resistance. The rally didn't look sustainable, and I was willing to give the trade a chance.

My decision to hold short wasn't a horrible one, but it wasn't a good one either. I was caught out of position on the breakout into the $543's and was under water a little over $2,000 at the 547.05 session high. The trade "could have" ended with a loss like that, if GOOG hadn't finally sold off a little at the end of the session, which wouldn't have been anything dreadful, but it simply wasn't good play on my part.

In the final hour, The Bulls ran out of steam and I got a chance to cover my short with a gain (second white arrow) and I took it. I covered in 541.50's. While it looked like GOOG "could" tank into the close, I wasn't going to press my luck. It also looked like the session "could" finish with "Ye Olde Knuckle-Biter" for The Bears, with GOOG closing inside the broken Channel.



GOOG did close inside the broken Channel, presenting The Bears with "Ye Olde Knuckle-biter," leaving them wondering if the breakdown was for real, or not. Often, those moves back inside a broken pattern are just a "One Day Wonder" and The Bears end up knocking it outta there, but they are uncomfortable for The Bears when they occur (the opposite of that for The Bulls, when a stock closes back below an upside technical breakout).

The slope of the lower trendline is 1.78546, so we "move the chains" by that amount and the trendline comes in today at 539.065. Yesterday's close was 539.34, so The Bulls and The Bears will have at it "right there" at this morning's opening kickoff ;)



Gain: $550

GOOG And AMZN: Triangle Breakouts

From yesterday:

"Any rally below, and up to, the 534.51 low of all of that resistance is a "gimme." Above it is Bull/Bear Combat Zone."

Rather than making an immediate bid for the "combat zone," GOOG had a Gap And Crap opening (the top of this Symmetrical Triangle, in yellow), went down and busted the stops below support in the 514's, then rallied.

Late afternoon, after the Symmetrical Triangle broke out to the upside, GOOG pulled back for a retest of the top of the pattern, which was at about 523.40. That looked like a real nice entry long the stock, but I preferred AMZN, which had a similar breakout of a Symmetrical Triangle and also was pulling back for a retest.



AMZN exhibited better relative strength during the morning Smackdown off the Gap And Crap openings. It not only didn't break to a new low, as GOOG did, it didn't challenge its recent low at all.

On the pullback to the top of the Symmetrical Triangle (pattern in yellow) after its upside breakout, the EMAs also were right there and were properly threaded with the 13 above the 21, and the 21 above the 34. Lovely. I bought 2,000 shares of it at 225.50 (yellow up arrow) with a mental stop below 224.32, the minor low just prior to the Symmetrical Triangle breakout.

AMZN put in a Symmetrical Triangle retest low at 225.43, then rallied, so I was glad that I didn't put in my order any lower than 225.50. Whew! I've been getting pipped at the post on some nice trades, by just a penny or three.



After the breakout above horizontal resistance at 227.95 (the yellow line), AMZN looked good to go for a short-squeezing late day rally to the Gap And Crap morning high of 229.79. With only about fifteen minutes remaining before the final gong, though, I decided to cash it in near $529 and sold just below that, at 528.95.



In the final few minutes, AMZN continued to rally and squeeze the shorts, putting in a new session high at 530.24, and closing at 530.00.

Market lesson: "Don't stay short an upside technical breakout AND a successful retest of that breakout."



GOOG rallied nearly $20 off its morning stop-busting low of 513.25 and also scored a new session high of 532.93 late in the session, just below the bottom rung of the stacked resistance that we discussed yesterday morning.



At the close, GOOG is parked "right there," below stacked resistance. The slope of the trendline at the bottom of the broken Channel is 1.78546, so we add that amount to yesterday's data point and it comes in today, September 27, at 537.28.

Despite yesterday's rally, it's still Advantage: The Bears since GOOG still is below the Channel breakdown. Anything above the bottom trendline, at 537.28 for today, is "Ye Olde Knuckle-biter" for The Bears because the stock would be back inside the broken pattern and The Bears "shouldn't" allow that, other than for an intraday gap fill, but then they would need to smack it outta there. The Bulls, obviously, want more than just a gap fill ;)



Gain: $6,900

GOOG: Rally Toward Stacked Resistance

From the weekend, on GOOG:

"GOOG also was looking like a stock that didn't want to go down any more, at least not immediately. It had held the 514's twice on Thursday afternoon, again of Friday morning, and basis the 5-Minute chart, the EMAs were bunched together and had turned bullish."

GOOG currently is called Gap Up four dollars in pre-market, to the $529's, which is more like the kind of rally that I was looking for on Friday when the stock came off $514 support. If the current indication holds up, GOOG will be rallying toward the bottom of the of the broken Channel, the bottom of which was validated as support on September 12, then broken on a Gap Down below it on September 22.

Resistance Levels (534.51-538.86):

534.51 - The 21-Day Kijun-sen
535.496 - The bottom of the broken Channel. It rises 1.785 per/day.
536.26 - The 8-Day Tenkan-sen
537.535 - The bottom of Kumo (Cloud) resistance
538.86 - The low prior to the Gap Down below the Channel

Any rally below, and up to, the 534.51 low of all of that resistance is a "gimme." Above it is Bull/Bear Combat Zone.

GDX, FCX And GOOG

Since Wednesday's technical breakdown through 64.73-64.76 double validated support, the GDX has fallen nearly ten points from there, and three of the downside targets got MADE in yesterday's session:

1. 58.57 - Horizontal support at Black Data Point #3 in The Channel
2. 57.95 - Measured Move off the broken Inverse H&S pattern
3. 55.80 - Measured Move off the completed Double Top



Unlike the GDX, after FCX gapped down at yesterday's open, it came roaring back for a gap fill. It sold off from there, but came right back and challenged Thursday afternoon's high of 32.30. Hmm-mm...that wasn't looking like a stock that wanted to tank anymore. It looked like FCX wanted to run to 33.00 horizontal resistance.

The EMA's still were properly threaded, so when FCX pulled back to test them for support, I placed an order to buy 5,000 shares at 32.00, just above the lowest of the EMA's (the 34), which was at 31.97.

"They" wouldn't let me have the shares. The lows for the next two minutes were 32.02 and 32.03, then FCX broke out above 32.30. Gr-r-r...

Ten minutes later...



Bang! 33.00! Gr-r-r-r-r-r-r-r-r...LOL.



On the next selloff, I bought 5,000 at 32.31, at what "should have been" horizontal support from the Thursday afternoon and early Friday morning highs. It wasn't support, though. Sloppy...sloppy...sloppy. UGH.

Although FCX did end up rallying again, I didn't like that so I sold into the next rally...



...at 32.53, which was the top (34) of the bearishly inverted EMAs basis the 10-Minute chart, for a gain of $1,100.



GOOG also was looking like a stock that didn't want to go down any more, at least not immediately. It had held the 514's twice on Thursday afternoon, again of Friday morning, and basis the 5-Minute chart, the EMAs were bunched together and had turned bullish. I bought 1,000 shares of it at 519.25, looking for at least a challenge of the 522.99 Thursday afternoon high, and possibly a nice breakout.




GOOG did make a breakout bid, but fell back. It still looked okay, but I had expected it to get through resistance on the rally in the NASDAQ and didn't want to give back all of my paper gain. I decided to "take the money" and sold at 521.50 for a gain of $2,250.

The minute that I sold...





...GOOG broke out and a few minutes later was three dollars higher than my exit price. Sheesh. Stocks "know" when we sell, then they rally! LOL.

Couldn't get all of the executions in one screenshot, so...

Buys:



Sells:



Gain on the session: $3,350

GDX And FCX: Gaps Down

From yesterday on the GDX:

"The Bears took over from there and were able to send the GDX down through double validated support on a CLOSING basis. Oops!"

The Bulls paid the price for that "Oops!" at yesterday's Crash opening below the 61.35 low of the Head of the Inverse H&S bottom, which completed a Double Top at 66.98 and 66.90. Yesterday's high was 61.23, so The Bulls were locked out of the Double Top for the entire session.

Quite interesting how that broken Channel played out. Yesterday's move down wouldn't have been as much of a surprise if it had occurred after The Channel broke down on September 15. But, in her typical fashion, Ms. Market disappointed the greatest number of players possible by getting The Bears to cover their shorts on the move back inside The Channel and above 64.74-64.75 resistance, and by getting The Bulls to buy that breakout.

Wednesday's violation of double validated support on a CLOSING basis wasn't anything with which to be toyed. Those things usually have "some" significance, which is why I always try to type validated support and validated resistance in boldface.



That Crash Opening was so ugly, I at least wanted to consider the possibility of "some" gap fill in the GDX. As the morning progressed, the GDX was noodling around below 60.55-60.54 horizontal resistance (the horizontal white line) and the EMAs were flattening out, so I went ahead and bought 5,000 shares of it at 60.37 for a quick trade.

I got a momentary upside breakout (white arrow), to 60.63, but then the GDX fell back below 60.55-60.54...below my 60.37 entry...and, into the low 60.20's. No, thank you. I threw it in at 60.21 for an $800 loss.




FCX has been so badly bludgeoned since its breakdown from the 2011 Falling Wedge, I wanted to consider the possibility of a capitulation move down at yesterday's opening. I also wanted some evidence of that "possibility."

Early trading looked "Cup & Handle-ish." Some technicians would complain that the Cup is too "V-shaped" and that it should be more rounded, but we've seen many of those "V-shaped" Cups work out fine in the past. That didn't concern me at all. It had the right "look," with the Symmetrical Triangle "handle" (in yellow), and the EMA's were "in gear," properly threaded.

I got long 5,000 shares at 32.65. The highs of the Cup were 33.115 and 33.10, so The Bulls needed to get through there. They did, but...



...not for very long. On the pullback, 33.115-33.10 wasn't support, which I didn't like. The pattern in green looked like it "could be" a Bull Flag, so I gave that a chance to breakout. Another bullish pattern would have been nice, structurally. It dragged out for too long to be a Bull Flag, in my view, and my 32.65 entry was being threatened as the pattern progressed in desultory fashion. Given that I was long a stock that has been VERY bearish and that I was playing against the dominant trend, I wasn't inclined to give The Bulls any more time. I sold at 32.86 for a $1.050 gain.



After I exited (white arrow), FCX formed an even larger Channel (the pattern in blue), but The Bulls couldn't do anything with that one either. FCX traded sideways-to-down for the remainder of the session, as has been its wont lately.



Basis the daily chart, the 30.61 target that has been IN PLAY since the early August breakdown of the 2011 Falling Wedge came close to getting MADE yesterday. The session low was 30.97.

Anecdotally, when we talked about the Bearish Wolfe Wave breakdown in late July, which turned into a Bearish Tidal Wave, we discussed the fact that the hallmark of a Bearish Wolfe Wave is to get the proverbial "everyone" wrong-footed on the Fakeout Breakout to the upside, thinking that the stock is going much higher. That certainly was the case among the analyst community. It is said that, "They don't ring bells at a top," but an awful lot of analysts were "chiming in" with targets in the $70's, right at the top in late July ;)

Market lesson: "Play what you actually SEE a stock doing, not what you hear analysts saying that it will do."





Gain on the session: $250

GDX: Broken Support - FCX: New 2011 Low

From yesterday, on the GDX:

"" The Bulls scored an upset victory in yesterday's session by taking out that resistance, and a target of 68.15 is IN PLAY
as long as the GDX trades above that 64.75 - 65.76 neckline.
The Bears are caught out of position unless/until they can crack it."

Players were well aware of that neckline in yesterday's trading. The GDX went down hard to test it, bounced off 65.73 very quickly and pounded higher. It happened so quickly, I wasn't fast enough to catch it.

That bounce off 65.73 was a double validation of support. Not only was the neckline breakout retested and validated, the bottom of the Rising Channel in the daily chart, which came in yesterday at 64.735, was validated within a half a penny!

That was a big score for The Bulls and the GDX rallied hard off it, but unfortunately for The Bulls...



...the ensuing rally got hung up at the bearishly inverted EMA's (white down arrow), and failed. The Bears took over from there and were able to send the GDX down through double validated support on a CLOSING basis. Oops!



It's been back and forth all week for control. At the gong, it was The Bulls who were caught out of position. Advantage: The Bears.



FCX continued down in the early going, off Tuesday afternoon's morphed H&S Top breakdown (see yesterday's chart). The Bulls initially attempted to form and break out of a Falling Channel/Bull Flag (in white), but it was no good and the stock went lower.

The Bulls regrouped and tried that same maneuver again, and the second time, they were successful (pattern in yellow). They broke out of it to the upside (first yellow arrow), then got sent back for a retest of the breakout. I liked the Bulls' chances on the retest and bought 5,000 shares of FCX at 36.49. The breakout put a target of 36.96 IN PLAY.

36.65 - High of the pattern
36.11 - Low of the pattern

36.65 - 36.11 = 0.54 points of upside on the breakout above 36.42

36.42 + 0.54 = Target: 36.96



While that were at it, The Bulls decided to indulge their morning penchant for channels and formed and broke out of another one (in orange). Lovely. Nested patterns and multiple patterns have a better chance of being successful when they break out, or break down. This breakout put a target of 36.89 IN PLAY, reinforcing the initial target of 36.96, just above that.

36.71 - High of the pattern
36.33 - Low of the pattern

36.71 - 36.33 = 0.38 points of upside on a breakout above 36.51.

36.51 + 0.38 = Target: 36.89 IN PLAY

When looking at these patterns from the microscopic vantage point of this 1-Minute chart, it's a good idea to check the 5-Minute chart to see if there's anything obvious that would millitate against the targets getting MADE. We already know that the longer-term time-frames in FCX are very bearish, so we want to be especially cautious being long a stock against the dominant trend.



Horizontal resistance from the last high (horizontal red line) was 37.23. The highest of the bearishly inverted EMAs, the 34 EMA, was at 37.07. Both of those were above the 36.89 and 36.96 targets that were IN PLAY, so FCX had some "head room" to rally, although it would be a foot race with those EMAs coming down. We shouldn't want to see The Bulls tarry.



The Bulls got it done and I sold my 5,000 shares when the 36.96 target got MADE.

Er-r-r...at least I thought that I did. I failed to notice until a bit later when I was recording the trade that the confirmation said BUY 5,000 shares at 36.96.



I checked the execution sheet. Yep. I was long 10,000 shares of FCX. My eye sight is worse than I thought.

Market lesson: "Don't get old." LOL.

Fortunately, Ms. Market was kind to an old man. When I caught my error, FCX was trading at the top of The Rectangle (in blue) in the next chart. I was able to sell the 10,000 shares at 36.99 and 37.00. Whew!

I will admit that I was tempted to hold some back for The Rectangle target in the 37.20's, which ultimately did get MADE, but decided not to press my luck at that point since I was darned lucky that I caught the mistake before I got into trouble.



After The Rectangle target got MADE, FCX went a little higher, to 37.41, then returned to its recent bearish behavior. It traded sideways-to-down, then formed and broke down from a wide-swinging Symmetrical Triangle (pattern in green), and closed a few pennies above a new low for 2011.



Gain on the session: $2,650