YHOO (Yahoo.) at 14.46 FORMING A POTENTIAL SWING HIGH AT MAJOR RESISTANCE (SELL)

YHOO rebounded from the YTD low at 11.09 (08 Aug) to break above the 3-1/2-month falling trendline (from 09 May/08 Jul/17 Aug highs), retracing over 38.3% of the 18.84/11.09 decline. The positive momentum suggests that further corrective strength is possible towards the major resistance zone from 15.41 (26 Jan low), 15.63 (16 May low) to 15.95 (07 Jul lower high) near 61.8% retracement of the retracement (Resistance 1) where bears may reassert to form a potential swing high. A downside reversal would target 12.45 (Support 1) which, if breached, would open 11.88 (Support 2) ahead of 11.09 for a potential retest (Support 3). However, a break above the 15.41/15.95 major resistance zone would negate the bearish scenario and allow bulls to seek 16.99 next which guards the 18.84 YTD high.

Trading Indication:
Short-term (Intraday):
Sell at 15.70 or higher;
Target at 12.45 and lower; Stop Loss at 16.00 (2.0%)
Long-term: Possibly buy lower

CSCO (Cisco.) at 16.21 Breaking Above Reverse Head-and-Shoulders Bottoming Pattern (BUY)

CSCO broke above the 3-1/2-month reverse head-and-shoulders resistance (from 31 May/21 Jul/11 Aug highs). The positive daily MACD studies suggest that there is scope for further strength towards 16.82 (31 May high, Resistance 1).) then 17.99 (11 May high, Resistance 2) near 50% retracement of the 22.34/13.30 seven-month decline. An upside break there would allow bulls to seek 19.70 near the head-and-shoulder target at 19.30 (Resistance 3).

However, a break below 15.41 (07 Sept low, Support 1) would expose the right shoulder support at 14.90 (19 Aug low, Support 2). Further weakness below would risk a deeper setback towards 13.30 (09 Aug 2011 YTD low, Support 3).

Trading Indication:
Short-term (Intraday):
Buy at 15.20 or lower;
Target at 17.99 and higher; Stop Loss at 14.90 (2.0%)
Long-term: Possibly sell higher
 

NVDA (Nvidia Corp.) at 14.25 Breaking Out of A Bullish Wedge and 6-month Bear Trendline (BUY)

NVDA broke out of the 5-week bullish wedge pattern (02 Aug high/08 Aug low) which converges with the 6-month bear trendline (from 17 Feb/31 May/01 Jun highs). The breakout confirmed the bullish RSI divergence formed from the 08 Aug to 19 August 2011 lows on the daily chart. While the wedge support (from 02/12 Aug highs) holds, there is scope for bulls to re-open the 15.36 lower high (02 Aug, Resistance 1). Clearance above would extend gains towards 16.26 (05 Jul high, Resistance 2) ahead of 19.96 (01 Jun lower high, Resistance 3). However, a break below 12.38 (06 Sept low) (Support 1) would expose the key 11.65 low (19 Aug YTD low, Support 2) near the wedge support. Sustained weakness below would initiate the next down leg towards 10.36 (07 Oct 2010 low, Support 3).

Trading Indication:
Short-term (Intraday):
Buy at 13.25 or lower;
Target at 16.26 and higher; Stop Loss at 13.00 (2.0%)
Long-term: Possibly sell higher

AUDUSD (Australian Dollar / U.S. Dollar) at 1.0570 Bearish Divergence on the Weekly Chart Points Lower (SELL)

AUDUSD formed a bearish divergence from 02 May/27 Jul weekly highs ahead of the the decline to test the 28-month long-term rising trendline from Mar 2009 low. While the deteriorating MACD and RSI on the weekly chart continue to point lower, scope remains for further weakness towards 1.0360 (Support 1) near the long-term trendline then the key 0.9925 support (Support 2) for a potential retest. A breakdown below there would open 0.9533 (Support 3) near the 50% retracement of the 0.8062 (25 May 2010 low)/1.1085 (27 Jul 2011 high) 14-month upswing. It would take strength back above 1.0764 (01 Sept high, Resistance 1) to stabilize the market. An upside break there would re-open the significant 1.1085/1.1016 resistance zone (Resistance 2/3).

Trading Indication:

Short-term (Intraday):

Sell at 1.0630 or higher

Target at 0.9925 and lower; Stop loss at 1.0765 (1.9%)

Long-term: Possibly buy lower

S&P 500 cash index (SPX) at 1173.97 POTENTIALLY FORMING A BEAR FLAG PATTERN (SELL)

SPX extended the 19-day consolidation (since 09 Aug YTD low) to form a potential bear flag. The recent advance stalled at 1230.71 (31 Aug) near the rising channel resistance (from 09/22 Aug lows/15 Aug high). The subsequent decline exposes 1135.91 (Support 1) near the lower bounds of the channel then the key 1121.09/1101.54 support zone (Support 2). A breakdown below there would open 1139.70 (27 Aug 2010, Support 3) for a potential retest. It would take strength back above 1230.71 (Resistance 1) to stabilize the market. An upside break there would re-open the significant 1249.05/1258.0 resistance (Resistance 2) (former support, 16 Mar/16 Jun lows). Only reclaiming the resistance zone would allow bulls to target 1286.56 (Resistance 3). near 76.4% retracement of the 1347.00/1101.54 fall.

Trading Indication:
Short-term (Intraday):
Sell at 1180.00 or higher
Target at 1100.00 and lower; Stop loss at 1203.0 (1.9%)
Long-term: Possibly buy lower

IAG (Iamgold Corp.) at 21.39: 13-month Rising Trendline Supports Consolidation (BUY)

IAG has been basing above the 21-month falling trendline support (former resistance from 02 Dec 2009/12 May 2010/09 Nov 2010 highs) and the 13-month rising trendline support (from 27 Jul/17 Nov/01 Dec 2010 lows) since forming the double top at 23.38 (24 Mar/06 Apr 2011 YTD highs). The recent advance off the 18.20 low (11 Aug) extended to reach 21.81 (02 Sept) near the 5-month bear trendline (from 07/08 Apr/25 Jul highs) which, if breached, would expose the 22.20 pivot high (Resistance 1). With the daily trend/momentum studies still constructive, scope remains for bulls to target 23.38 (Resistance 2). Clearance above would initiate the next upleg towards the equality target at 25.00 (projected 16.06/23.38 from 17.69, Resistance 3). However, a break below 19.26 (Support 1) would indicate continuation of the 5-month base and reopen 18.20 (Support 2), then 17.69 (Support 3) near the 13-month rising trendline support where bulls may reassert.

Trading Indication:
Short-term (Intraday):
Buy at 20.30 or lower;
Target at 22.20 and higher; Stop Loss at 20.00< (1.50%)
Long-term: Possibly buy lower at 18.20

USO (United States Oil Fund) at 34.45 BEAR FLAG UNDER 10-MONTH HEAD-&-SHOULDER RESISTANCE (SELL)

USO’s corrective bounce off the 30.31 YTD low (09 Aug) within an upward channel indicated a bear flag and stalled at 34.89 (01 Sep high), just short of the formidable 35.14 shoulder resistance of the head-and-shoulder top pattern formed over the last 10 months. While the upper bounds of the channel near 35.14 caps, there is scope for a swing high ahead of a downside reversal. A break below the pre-gap low at 33.69 (Support 1) would expose 30.31 for a potential retest (Support 2). Additional weakness there would risk a deeper setback towards 25.50, the head-and-shoulder target (from 45.60/35.14, 02 May high/27 Jun low, Support 3). However, reclaiming 35.14 (Resistance 1) would negate the bear flag/head-and-shoulder patterns and shift the near-term focus higher. An upside break there would stage 37.33 (Resistance 2), near 50% retracement of the 45.60/30.31 ahead of 39.25 (Resistance 3) near 61.8% retracement.

Trading Indication: Short-term (Intraday):
Sell at 34.70 or higher;
Target at 30.31 and lower; Stop Loss at 35.20> (1.4.0%)
Long-term: Possibly buy lower