I, for one, could use a nice quiet close into the end of the week. The recent market action has been mentally taxing, to say the least, and that is true even though I have done my best to just lay low and pick my spots. I remember trying to be very active in this type of tape: The rewards can be huge, but so are the risks and the mental strain. This is a great time to take an early weekend.
Most of the patterns we are seeing, here, are the same. Ones that are catching my eye from the bearish side are those that are not quite bouncing with the market. Take Ameriprise Financial (AMP), for instance. This name dropped with the market -- and even saw one of those early morning illiquity tails on August 24. I've been discounting those tails and focusing on the opens/closes for the 24th.
Since that time, it has been trading in a small channel. The risk is that the pattern is nothing more than a bear flag, so a close under $108 would trigger additional downside. In this case, we would be looking towards $100, on the price target. The Bollinger Bands have opened up to the downside, and the stock is even trading below its 10-day Simple Moving Average (SMA). Additional indicators -- representing momentum, trend and volume -- are also all bearish, as are price pattern and volatility. Weakness abounds. Until AMP closes over $115, the bears are firmly in control. The bulls could help themselves by getting the stock over the 10-day SMA. If I were looking at anything here, it would be bearish call spreads, targeting a short $115 strike and long $120 strike.
The weekly picture isn't any better. While we don't have the flag pattern, we do have a huge break below support at $122.50, and a new bearish channel starting to form. The Force Index is making new lows in front of price, as are the Vortex Indicator and the Relative Strength Index (RSI). Momentum, trend and volume are all making new closing lows compared to price. Now, we have to take this with a grain of salt, since the big tail on price throws off the indicators a little, but this is a very ugly picture. In combination with the daily chart, I expect $100 to $102.50 to be tested before we find a low.