Musical Chairs

Posted by downtowntrader | 8/31/2006 10:19:00 PM | 0 comments »

The markets have been rising and you have to wonder if there is a big game of musical chairs going on. The big question is when will the music stop and who will have chairs to sit on. The markets didn't do much today but they closed weakly. With tomorrow being a shortened day and before the Labor Day weekend, expect volume to be extremely low. There is a chance that the downtrend will resume next week when volume returns, so I am starting to look at possibilities for shorts while maintaining a near term bullish bias.

TXU looks ready to break out here so keep an eye on it tomorrow.

TWGP cleared resistance but had a weak day today. Volume did tick up on the breakout day though.
CCJ came back to clear the triangle. It may follow through tomorrow.
It looks like HAL will begin to accelerate to the downside here.

HLX looks like it may fall out of this little wedge and the bigger triangle like pattern as well. There is still a small chance it breaks higher so be careful with it.
LVS may be having a hard time with resistance here and may be forming a larger head and shoulders top.
AL is another basic materials stock that may be forming a large topping pattern. It still has some room before completing the head and shoulders top.
UARM may be resuming the downtrend here.
ANDE may get a nice bounce after clearing the downtrendline. This can be classified as either a descending triangle breakout or reverse head and shoulders. Both yield a nice target.
ODFL had a nice bounce to resistance and may break down here.
TS is testing a long term trendline here.
Not sure what got into ORB today but they had a strong rush in volume mid day. Keep an eye on resistance above.

The environment is getting more dangerous and while things are still looking bullish, it makes sense to protect any profits made from recent trades. Be careful out there and adhere to your exit strategies.

Good Luck,