Con-Way (CNW), Freeport (FCX), Southern Copper (SCCO), Goldman Sachs (GS) in Bearish Mode?

Con-Way (CNW), Freeport-McMoRan Copper & Gold (FCX), and Southern Copper (SCCO) and Goldman Sachs all appear to have triggered shorts, suggesting they're in a bearish mode.

Yesterday’s sell-off resulted in technical damage in many individual names. I am seeing many potential distribution topping patterns preparing for further downside. Recently, I highlighted topping patterns in Con-Way (CNW), Freeport-McMoRan Copper & Gold (FCX), and Southern Copper (SCCO), all have triggered as shorts and began their descent. Many individual names, such as Goldman Sachs, are in distribution mode with bearish setups, while several other names are only beginning to form distribution patterns. Results of bearish pattern triggers will play a crucial role in determining the markets outlook.

A broad-based sell-off took place yesterday in all the major market indexes, erasing up to two weeks worth of gains. Is the uptrend over? To determine the health of the current uptrend let's examine the characteristics that define the bullish trend in the SPDR S&P 500 (SPY). In addition, a potential distribution topping pattern in Goldman Sachs (GS) may be a few steps ahead of the markets. A trigger and follow-through of the GS pattern, and names in similar stages, can provide a roadmap to the future direction of the overall markets.

In September 2010, an intermediate uptrend began in the SPY. The defining characteristic of the bullish trend, in my opinion, is an ascending trend line (log scale) that began from the lows of August 31, 2010, with a second touch point on November 30, 2010. The line continued to extend higher and tested for a third time on January 28, 2011, holding. Currently, the 20-day simple moving average is aligned with the intermediate trend line, adding validity to this support area. Yesterday’s price action traded down to this level and held. If there is a confirmed break of this support level, provided by the trend line and moving average, the uptrend is over.




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