Okay, since things have been pretty choppy in the markets lately, I figured we should point out a few charts. Firstly, Steve Puri, as always, has an intriguing chart up of the markets which shows a descending triangle and very bearish implications. We should rally off a test of the recent lows, but the assumption would be that the ensuing rally would fail and make lower highs, setting us up for a big drop. This of course will have to be monitored on a daily basis, but overall the pattern truly is taking shape. You can play a directional breakout of the pattern to either direction should we get one.
(click to enlarge)Secondly, Kevin has posted up a chart showing the unbelievable strength in the Japanese Yen (FXY). I have been long the yen for the past few weeks now and it has really exploded as of late. As deleveraging continues, I expect the yen to continue higher as it has recently broken out to multi-year highs. I will be taking profits at each major gap down in the markets, as the yen is trading inversely to the markets currently.
(click to enlarge)Lastly, Blain over at Stock Trading To Go has 12 bearish continuation patterns laid out for us in the charts. Here are my three favorites: LDK really has broken down, hitting new all time lows and the pattern as you can see is a sharp descending triangle almost.
(click to enlarge)ANR has a channel between $30 and $45, and you can play a breakout in either direction (my guess would obviously be to the downside).
(click to enlarge)JRCC has a very similar setup (as do many of the coal names) in that you can play the channel pattern here of $15 to $23. Short on closes below $15 and get long on breakouts above $23.
(click to enlarge)Check out the other 9 bearish continuation patterns in FSLR, GOOG, BIDU, MOS, AAPL, YHOO, MEE, NYX, and DRYS that he has laid out here.
