By Sell Puts
You all know i am a bear, yes you got me. You ask why? The charts speak volumes. I like technicals yes. They speak volumes. Case and point Golden Slacks.
The chart on the left shows Goldman in a upward trending wedge and or pennant, WHATEVER they both signify consolidation. I'm thinking we have a greater percentage chance of a drop here, though others may think we are in for a fake out with a quick run to 165. If you take into account the massive trading programs we are over extended, the funds are levered up and need to cash the register.. AHEM end of quarter. The highlighted red circle is where the PPS has fallen out of the wedge, just barely... to early to call, but a straddle could be in the cards or a cheap strangle.
LOWER INDICATOR signals:
Look at the volume decrescendo since April 14 till today *consolidation patterns form on decreasing volume in anticipation for the breakout. THE large red vertical oval highlights a volume spike which coincides with a breakout of the channel leading to the current trading pattern. This is signal 1
Signal 2, the stochastic is indicating overbought conditions, just in time for GS to kiss the 100 SMA purple line. Back test.. GS kisses then drops back.
MACD indicating overbought.
lets wait and see
Here you have JPMorgan, i posted a chart back in May highlighting its odd trading pattern. THe pattern started forming July of 2007 where it sells off touches its lower downward sloping trend then trades back up to 48 PPS, back down in even intervals each time back up to 48. This has repeated four times. THe current trend we are in trending upward toward 48 but has given out around 34. My basis for putting this chart highlights this breakdown, whereas JPM trades down to 12 pps hitting the lower red line. THis is a very drastic scenario but crazier things have happened. stories are made of people who execute trades like this with success. Take a look a the DEC 09 JPM 15 puts.
