Small capital risk in shorting XLI tomorrow at the open on this rectangle pattern with a stop above $27.60 and if it holds, the downside target of $25.30. Note while rectangles as generally a continuation pattern, please note todays Doji. I feel current market indecision will take it back down as it has the last two months. This move may not seem like much to some, but I’ll take a 10% move in 7-10 days anytime and twice on Sunday 🙂
Another area for possible shorts are the rails. Most are forming megaphone or rectangles which like the industrials, formed Dojis today at upper resistance. Good area for a low capital risk short trade. In KSU [right] I will place my stop above the swing high of $27.60
A last note: These formations could also turn into triple tops or if they break higher here with volume, deemed double bottoms. I am merely going with the current market indecision on attempting to short them rather than long. If you feel the market is going higher – go long off the formations. Just food for thought.