Yahoo is showing some weakness on the day of the Alibaba IPO. The current price target is the upper median line extension and the red ellipse. The price advance backed-off, however, and now YHOO is playing with support at the level of the prior high. Today's action is likely to be volatile - be careful out there.
We need to trade the markets in front of us and not the markets we expect or believe we should be seeing. If you lean to the bearish side these days it can be challenging to take bullish trades. The SPX and MDY charts, however, are suggesting that prices could bounce higher in the coming week. Let's look at some charts now with the idea that we will trade this rebound to the upside.
Alibaba had an exciting first day of trading. Price shot out of the gate and zoomed to just below $100. It is amazing how round numbers like 100 often serve as resistance and support levels. From there BABA dropped to its low of the day just below $90 before starting to climb higher again. Notice how price finished the day at the upper median line of the modified-Schiff pitchfork and the 38.2% retracement level of the high-to-low range.
Last week's action is not what we were expecting from the precious metals sector. We were assuming that Gold and the mining stocks would start September with a break higher, not lower. The metals have been in beat-down mode for three years now. This cyclical bear market is getting long in the tooth and will end at some point. When it does we'll be ready to participate. Until then, keep some powder dry.