Margo's Swing Journal

Many of the major indices look just like this.....NDX (QQQ), SPX (SPY), BTK (BBH), SOX (SMH). All are at their respective shoulder highs and a likely spot to turn back down. IMO, it's a pretty low risk short with smaller positions & tight stops.
 

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I have been watching these H&S formations in action for 3 weeks now. But sellers have not been in command since Oct.

Bullish action since Jan 2 suggests it is unlikely H&S breakdowns will occur.
 
Check out VRTS.

It is right underneath a big S/R line(20). I would usually short this at resistance, but Friday's action is keeping me on the tentative side.
 
Quote from Babak:



:D You read my mind! I've been wondering the same thing since Margo started posting but didn't want to be a party pooper.

:confused:
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I've been wondering for months now but I too didn't want to rain on the party. If he/she doesn't want to reveal that fact that's OK with me. But I couldn't take it any longer. let's just say curiosity finally got the better of the pussycat :D
 
"If the milk turns out to be sour, I aint the kinda pussy ta drink it."

wink.gif
 
Quote from margo_trader:

Nitro,

The AMGN chart is an excellent example of the waves that normally occur following a major breakdown. First, there is the sharp selloff when key supports are violated. Second, there is profit taking by traders who are short as leading stocks near support areas. This profit taking wave occurs as a result of scalpers / margin rats who trade bounces off supports and buying by shorts to cover positions which they shorted at a higher level. These profit taking waves often result in counter trend rallies back to or slightly above the support that was initially broken. Third, in a normal trend and after the initial breakdown and profit taking wave, you see a continuation of the trend. This wave is less violent but stronger and longer as the shorts become more confident and the margin rats step back. In a nut-shell, this means there are 3 waves.....breakdown (hard and fast), profit taking (rallies back to resistance) and then a continuation of the trend (less herky jerky than the initial breakdown). By definition, AMGN has been in the profit taking wave the past few weeks but has faded a bit off of the recent highs. Personally, my favorite shorting spot occurs in wave 3.

To answer your question, I'm not short AMGN....not because I don't like the setup. My long term plate is full at the moment.

Happy trading.
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Okay.

nitro
 
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