TCM Notes : 7/8/09

• Markets escaped distribution Tuesday as volume was lower than Monday's. IBD did change their market outlook to uptrend under pressure though. The head and shoulders pattern that has persisted amongst the indices looks to be taking control. A break of the neckline will be needed for most to ratchet up the selling. That level varies depending upon who you talk to. 870-880 is the range given. A break of 880 could precede a move to 810, and an overshoot of that level could see the larger inverted head and shoulders pattern complete. We'll take it a session at a time though.
• ERY could see some resistance at 28.45 today. This corresponds with the 86dma and I suspect it will provide consolidation much like the 50dma did. Of course then we gapped through it to higher ground. We could see a similar pattern unfold with a target of the 150dma currently at 33.41. It almost appears that this one has completed a bullish inverted head and shoulders pattern. Only until all moving averages are beneath can we say this is in an uptrend. With the CFTC reviewing the oil casino for the next two months we may just see cooling out in crude. And that would be a good thing for ERY.
• OCN remains strong amongst weakness. This one has a story that is not widely followed. The high volume up days are a dead give away that this one is under accumulation. They should report earnings around August 4th. I'm expecting a measured move higher establishing a whole new trading range.
• XLV, XLP, and XLU are looking to provide shelter during this correction. The bias has certainly made the rounds recently. And when it becomes the consensus view it will garner momentum. And then those who made the bias available will use those levels to scale out. And this will give way to the next quarterly rotation.
• As the Nasdaq continues to breakdown TYP could be a nice way to capture the move. It's long counterpart TYH is trading at 77.50 and breaking down. TYP is showing me some very bullish signals. It's finally garnering some attention via the volume expansion. There was a hammer low recently. 20.17 is the low from that candle which will serve as the ultimate stop on this, and it also represents a double bottom. It's had a sharp move, but I expect it to consolidate around the 50dma before heading higher towards the 86dma. That would make for a target of 32.72 at the moment. I'm going to try to pick some up around the 9dma or 20dma. The 9dma is setting up to cross up through the 20dma which is another bullish move.