An online trade in the stock of GS - Goldman Sachs Group Inc., shows the benefit of trading a pattern within a pattern. The daily chart of GS confirmed a downtrend at the close yesterday. Point 3 becomes a lower pivot when yesterday’s candlestick closes at a lower low for the day. I would have sold the stock short had I seen it, but today provided an additional entry.

GS gapped lower, but bounced immediately after the opening bell. With the trend down, and the market drag, I’m looking for a short. Goldman Sachs isn’t extended to the downside. It had only triggered the sell signal yesterday. The 15 minute chart shows the entry after the third bar. A classic trading pattern.

I’m long QID here with a stop .25 below today’s low. Keep an eye on the daily trendline of OIH. I’m taking DUG long if that trendline breaks.

Two stocks I mentioned, MMM and BRCM, ended their runs just shy of targets 93 and 34. Today the market is beginning with a fairly negative tone, as Nasdaq futures are -13.5 as I write.

It’s aggressive, but QID can now be bought. The higher high will change direction. A more conservative entry will come after QID goes up, pulls back, and then continues higher. That would change the trend. With QID trading 5 points away from the 50dma yesterday, I see some extreme tension on the rubber band. Price needs to snap back to the mean. We had a failed aggressive buy signal last week. My gut says this time we’ll be moving higher in QID. We’ll see.