WEDNESDAY'S SPIKERS

What’s great about spikers is that if you don’t get to catch them on the way up, there’s a good chance for you to catch them on the way down, by shorting, of course. Not all spikers will fall as fast as they went up and many will spike even higher and stay there, not giving you the opportunity to short them. What you need to look out for are shooting stars, doji, bearish engulfing, and dark cloud cover candles. When the time is right, you’ll be ready. Save these for your short-term trade watchlist.

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TODAY'S BREAKOUTS & BREAKDOWNS

We’re broken “the triangle”, that dreaded zigzagging consolidation zone where most stocks made zero progress for the past 10 days. Today’s gap triggered it all by breaking through two short-term resistance areas and being unable to fill the gap, had no other choice but to “flag and fail”. We also hit a short-term intra-day selling climax which was very visible from 3:00-3:30PM. Is it the bottom? I don’t think so. We have a much greater chance of testing 1) October 16th’s low and finally 2) October 10th’s low.

As for breadth, we did pretty good considering the massive drop we had today, but we’re still in the area of having new highs in the single-digits and new low in the multi-hundreds. I kept saying that a rally cannot take place with these numbers being hit. This trend has been going on for weeks now and as long as we’re in neutral/negative territory, the market’s breadth will only get worse. We had slightly increasing volume today compared to yesterday and Monday, but it was all mostly selling volume and not true buying volume. The market will break consolidation to the downside in full force if this is not taken care of quickly.

As for breakouts and breakdowns, I found two clean breakouts and numerous breakdowns. The first two charts are breakouts and the rest just sort of died today. They all have my comments on them.

Don't forget to try out the Free Trend Analysis. It's FREE, so give it a shot!

TODAY'S BREAKOUTS & BREAKDOWNS

No breakouts today, which happened to be the 2nd worst drop for the Dow in points (733!). In fact, the markets have been so erratic, I haven’t found clean breakouts for the past 2 days and just a few breakdowns, so I didn’t bother to post on them. However, early this morning at 12:03AM, I did write an article on high-reliability reversal signals because I found hundreds of them while I was going through my charts at night. This prompted me to put out a clear and immediate warning, and it was my signal to go 100% short…again.

Fundamentals don’t really matter in this market at this stage, but technicals do. Fundamentals are oblivious to fear and panic and are useless, but technicals paint a clear picture of that fear in action and therefore allows you to take your own action in response. Traders must recognize these reversal patterns, because it doesn’t matter if the market jumped 11% on Monday. Longs who haven’t sold already will lose all of those gains tomorrow! These signals are not “just stupid pictures on a chart”. I’m up over 51% for the month of October, personally, and have relied on the very same signals to lead me to make the correct trades both long and short. In fact, today was one of my best days this year. These signals are not to be ignored and I’m demonstrating how important they are right now. I hope each trader here will seriously study these patterns and be able to identify them. If you need explanations, just ask, and I’ll be more than happy to make sure you understand.

We had several breakdowns today, and I’ve been identifying critical areas on the charts in my previous articles but I feel that, by now, you should already know how to identify all of that yourselves. I am only identifying reversal signals so that traders who are unaware of what happened today can be prepared in the future to avoid getting killed on days like today. Remember, these signals serve two purposes: 1) loss prevention for longs, and 2) profits for shorts.

Don't forget to try out the Free Trend Analysis. It's FREE, so give it a shot!