$XLF : Great setup for a short

With news of JP Morgan making a loss last quarter and now Morgan Stanley having a cap on immediate cash bonus, XLF is clearly being setup for a great short.

Let’s review the chart.

1. We can see that on the Ichimoku Daily Chart for XLF that it is bumping into the resistance level at $14.

2. While the Daily Chart shows that XLF is in bullish territory, the last 3 candles is not showing great strength. The candles are suggesting that XLF may turn from here.

On the Ichimoku Weekly Chart, the setup is clearer.

1. Like the Daily Chart, we can see that XLF is hitting the resistance at $14

2. The key difference is XLF is still bearish on the Weekly.

3. In the coming 2 weeks, XLF will be slamming into the kumo resistance and the flat kumo top is suggesting that XLF has a higher chance of consolidating below $14.

I will be establish a SHORT CALL spread on XLF.


Research In Motion ($RIMM) : Letter ‘h’ . Short

Ichimoku 1 min chart.

Letter ‘h’ sighted. Short


AAPLE : Hitting Resistance

AAPL has a good run since the last rally. And it deserves so.

A premium brandname, great product line and an incredible quarter despite Steve Job’s absence.

However, looking at the Weekly Chart suggest that it is going to slow down and take a break.

1. The candles are getting shorter.

2. It is hitting resistance at $124 on the Weekly chart.

3. And there is also a huge kumo ahead.

At the same time, if there is a successful breakthrough above $130, then AAPL may on to something. Perhaps a new product line, the return of Steve Jobs or something that blows our mind off.

For now, I am anticipating that it will retrace for a while. With a retracement, it will setup a possible cup-n-handle formation.

View Weekly Chart