Linda Raschke Blog

A good part of trading is about doing nothing.  The good patterns that offer low risk opportunities simply do not come along as often as we would like.  Here are two nice patterns that formed on Friday:

Canadian Dollar has an inverse head and shoulders bottom.  It had nice price rejection on Friday when it tested the area of a previous low.  Price rejection of lower levels when there is negative news is often a sign that the market is all sold out.  (When looking at longer term  currency charts, the "cash" will often show slightly different levels, but the cycles wiwll be the same).

Another chart that also showed price rejection  on a test of the previous low:  AAPL  The nice thing about this chart is that there is a clear "three pushes down".   The 20-period EMA comes in aroudn 130.  The bad thing about AAPL is that of the NAZ shares, it has been one of the weakest. The weekly charts have been so negative, that a tradable bounce only can be expected.   

If the SPs can take out 1371 to the upside and get back towards 1400, it could go a long ways towards reducing the excess negative sentiment that has built up.  The cycle in many of these NAZ shares suggests that they are oversold enough now to provide a bit of "fuel for the fire", even though they have been laggards.