Shooting Stars

Posted by downtowntrader | 8/14/2006 09:13:00 PM | 0 comments »

Lot's of shooting stars after the indices reversed today. Things are looking bleak for the bulls as the good news of a cease fire failed to hold stocks higher. Gold, Oil, and Materials were weak again as the dollar rose. The dollar is up against resistance so it remains to be seen if there is more behind this move.

Here is a chart of Copper showing a failed breakout. Usually when a breakout fails the move down is swift as trapped bulls and shorts sell aggresively.

Here is a chart of the DJIA showing the shooting star. Slow Stochastics has plenty of room to the downside. It looks like the relative strength for the industrials vs the $crb index is about to break a trendline. This is a negative as it shows a slowing worldwide economy.
I've highlighted ATI a few times and it is moving nicely. It is nearing support with both a horizontal and the 200sma nearby so it would be prudent to tighten up on a stop and get ready to watch for a consolidation.
NTRI looks like it failed to get over trendline resistance and had a negative candle. With MED getting hammered to the tune of -26% after earnings it could be a rough day for diet stocks.
With materials stocks weakening keep an eye on NUE. It looks like NUE is breaking out of a triangle here.
TS looks similar to NUE and which makes sense being in the same sector.
It looks like there will be some weakness the next couple days with a possible reprieve for options expiration. Good Luck,