coiling

Seems like we're at a something's-got-to-give level at this point, sitting right on top of the 50-day MA, bouncing twice only to end up in the same spot (price made 4 attempts to close above the 20-day).

Descending Triangle, would have a large measured move in whichever direction it breaks out to

the Obvious

SPY broke down from an ascending wedgeThere's a clear range of where the buyers and sellers are lined up
and there's a clear consolidation pattern developing that can resolve quickly (and should resolve quickly and with volatility, as one side will have to cover).A slightly bigger picture shows the "Death Cross" setup. When a moving average cross happens, typically the first trade in the direction of the crossover is to fade the price pullback. In this case, the 50-MA crossed under the 200-day, price pulled back to the 200-MA then continued to sell-off. It's sketchy down below from here because of the double-bottom potential.Then, on the weekly, there's this Bullish Wolfe Wave setup taking shape...

pullbacks

While price bounces within a narrow range consolidation, it's bound to break out sooner or later, and today provided some examples of why a higher probability trade results from waiting out the move for a pullback.
Here was an example in POT where price had been bouncing around in a congestion range since the previous afternoon. Notice the opening drive through the bottom of the range resulted in a snap-back to the top of its range (example in waiting for a pullback). While later in the day the breakdown pullback was easier to gauge.Here's what I was looking at on a faster chart with entry/exit arrows:Later in the day POT provided an example of why not to get too eager jumping into a breach of support/range. I later missed a decent entry:
RIMM broke down from a symmetrical triangle (a form of narrow range consolidation) and pulled back before extending lower. I actually exited half at the PDL (red dotted line) before exiting the remainder at the green up arrow.FCX; I didn't actually trade the first breakdown from consolidation, but the break-out later in the day provided a good opportunity. This highlights the concept of avoiding buying a breakout/breakdown as it's happening. If you're not in it before it breaks out, it's best to wait for a pullback before entering. In this case one might have bought the initial breakout and may have been stopped out on a return back to the congestion range. A realistic target in today's market (mixed/neutral internals) was within that PDC, PDH, or Open price range (blue dotted line, green dotted line, yellow dotted line respectively).
And finally, another one I missed today (thinking it might pull back more) was a symmetrical triangle in IWM:

Congestion Breakout

I mentioned this pattern last week, and here it showed up on the 5-min. SPY today:
Price chopped along in a sideways box pattern. The final retracement off of the high of the consolidation range was shallow, and found bids quickly.

Monday 08/10

Got a little selling today, still nothing decisive. On the 60-min chart below we see momentum continue to work lower. The ellipse on the 3/10 oscillator highlights whether we'll see the fast line correct off of the slow line in the coming future, or perhaps we'll get a fresh momentum push higher from here.
The SPY gaped down into my support pivot this morning and eventually filled the down-gap forming a bear flag. The three red arrows represent good shorting opportunities. The first two worked well, while the third didn't follow-through. Notice how the momentum oscillator was bearish (negative slope) for the first two arrows/pullbacks, but for the third one the 3/10 was leaning bullish and "recovering" the slow line, a subtly worth paying attention to.
RIMM traded beautifully today and perfectly highlights the concept of consolidation preceding expansion. If you can draw a horizontal line that touches most of the price action you can easily see that you're in a consolidating range. The longer the time spent in consolidation, the better is the likely expansion out of that range.
My blog upkeep may get a little sloppy for the next few weeks as I get closer to moving. So a combination of packing and socializing may occupy more of my time for now. You can always keep up with me on twitter though :)

shake-out

As climactic as today's downside action was, the only thing it seemed to resolve was to shake out the "weak" hands, and seeing more upside isn't out of the picture.
To start with, the VIX came very close to it's most recent lows before bouncing up and seeing markets tumble.The Dollar strengthenedTreasuries are a dead man walking:The SPY set up perfectly this morning. Price stair-stepped the gap-fill.We have seen how powerful these moves out of consolidation ranges can be, and as strong as it was, price is now flirting with returning to that very same range!!!Price gapped up outside our keltner channel this morning and above R1. The sell-off turned around right at the lower band of the keltner channel (corresponding with 200MA, AND a momentum divergence). The next leg of the move down ended right around S2, corresponding with the highs from May 29th, that preceded a large momentum gap up into our current range (also present was a building TICK divergence as can be seen from my 1-min chart above). The arrows on the chart just highlight how well price reacts to the Keltner channel; and when price is trending outside the channel, you know you have an impulse move that can be profitable when looking for little continuation setups on a shorter time frame (flags, pennants on a 1-min chart for example). Two strategies I've mentioned before worked today as well. First, we had a First Cross short setup (we also had one yesterday which I forgot to mention).
Also, we had a gap up and a return to the previous day's close. Granted our move to the PDC was quite long in the tooth (and therefore, the probabilities are lower), but we had the low of the day up to that point did register a lower TICK reading AND we had a Support becomes Resistance setup ocurring at the time. Not to mention, this is a SCALPING technique!

Thurs. 06_04

Back into that previous consolidation range (which is fine b/c we tend to get nice moves coming out of them, whichever direction they go). Things feel tightly wound at this upper range and I wouldn't be surprised to see a blow-off top come the close of this week. As SPY was making new highs on the day neither the TICK or the Nasdaq were confirming the move.Basically a slow drift up all day. A gap up (out of the keltner channel), a retrace back to pivot point, which acted as support (and coincided with the 20-EMA) and a follow-through to R1 (coinciding with keltner channel upper range). This is a move to pay attention to; an impulse out of the keltner channel, a pullback to the midline area, followed by another impulse up). Price based around R1 most of the day before getting a pop back into that previous consolidation range.
All-in-all we're just biding time while we digest the move from last Friday into Monday.
A retrace in FCX was on the radar for today. The First Cross entry was in the perfect spot, right on the opening range high, while the target was back up to the previous support range.

NRC

Narrow Range Consolidation (NRC), as to be expected after the push from the previous two sessions. SPY was a very sloppy tape. The opening looked like it might have a push higher, but was sold quickly at the R1 level. The middle of the session had a little breakout move but I didn't participate in it:We're establishing our latest consolidation range and looking to play a breakout in either direction.
I took two losses shorting FCX today as I was looking for a gap-fill, but price quickly recovered it's lows. The ellipses marked the short positions I took, but got stopped out of on price reversing. Through the middle of this base it formed, I was thinking of the idiom; "The ship ain't sinking." But once price slipped out of this base I was back to thinking gap-fill (dashed horizontal line shows the previous day's gap low).
Not sure where I stand on FCX at this point; currently it has a momentum divergence and sitting in an island.HES got sold hard today on huge volume. Not sure what the story is there.SHLD breaking out and looking to cross the 50- & 200- Moving Averages
ATI breaking out as well