Thread: Returning to the scene of the crime -market update/charts

7/30 Commentary: The relief rally brought a big sigh to wall street as bargain hunters came in buying today. The 60 minute charts continue to forecast correctly, as they are forerunners to direction moves and their life expectancies.

Some economic things to watch this week are the crude inventories on Wednesday the 1st, and the unemployment rate which is to be unveiled on Friday, August 3rd.

It is your job as a trader/investor to play detective here and look for clues regarding directional moves. Sometimes we have to pull out the magnify glass and see who's finger prints are on the chart. Other times we must find the smoking gun, to see who is attepting to kill the rally. Learn to hone your skills as a trader. Don't be afraid to examine your mistakes. Personally, I think the institutions are the suspects in this crime against the market, and I think they will return to the scene of the crime.

I believe that they allow the market to run up for a short period, only to sell into the rally attempting to gain top dollar for their shares. This will produce lower highs and more than likely seal the fate of the several reversal patterns on the indices. This will provide a great short entry point on many ETFs that mirror the averages. It also might be a great place to move into the G fund if you failed to do so before the selloff began.

Look for the Dow to rise near 13,600 to 13,692 to form a right shoulder, which would be about a 300 point rise from here. The S&P 500 could pull back to its confirmation line at or near 1484 to the 1490 area. The S&P 500 could also rise to backtest its busted intermediate trendline at/near 1525. Remeber, the 10 day moving average has now crossed below the 50 day moving average. That is a very bearish sign. The writing is on the wall.

The Transports are also forming a H & S pattern. I am watching the Dow and the Transports for a valid application of Dow Theory in regards to the 53 month bull market.

check out the fund charts below and study them!

The best of trades,

The Chart Pattern Trader

C fund daily chart:
http://stockcharts.com/h-sc/ui?s=$SP...89&a=112452373

60 minute chart on the S&P 500 (C Fund):
http://stockcharts.com/h-sc/ui?s=$SP...037&a=84656486

S Fund daily chart:
http://stockcharts.com/h-sc/ui?s=$EM...392&a=92954125

I fund daily chart:
http://stockcharts.com/h-sc/ui?s=EFA...179&a=87844496