Today is a great day for those who traded the double bottom or inverted head and shoulders pattern. The market gapped up, traded in a range, then pulled back, but was unable to close the gap by late morning. This is a strong sign that it can sustain the positive momentum for the day.
Above is a 2 day 5min chart of The Bear Stearns Companies Inc. (Public, NYSE:BSC). Enter on break of neckline. Target move is the height measured from the head to the neckline. You can use the Fibonacci Extension (200%) drawn from the head to the neckline to see the target better. Given the choppy nature of the markets lately, it would be wise to take partial profits at the 61.8% extension and hold the remainder for final target.
This is a 2 day 5 min chart of $MNX, the Mini Nasdaq 100 Index. Same story as BSC, only thing is alot is left on the table as it makes a final surge 15 min before market closes.
$MNX is a good proxy for those who want to day trade options on the market. It has much better bid/ask spreads than the OEX, and on the hand, has a wider daily ATR for intraday movements than the SPY and DIA.