The Dow just can't seem to get, and stay, above 13,000. It's been trying for a few weeks now and just keeps failing. If it can't go any higher, might the Dow go lower? That's what I'm wondering.

Notice how the Dow's been clinging to the lower-end of the channel, or diagonal support, since last week. Going into next week, I'll be watching this line very closely. From my perspective, a breakdown below 12,800 could pave the way to additional downside. Confirmation would come on a drop below 12,700.

The set-up in the Dow dovetails with two other patterns I've been following. Both Fannie Mae (FNM) and the Financials Select Sector (XLF) are on the brink of breakdowns. Cracks in these two should eventually drag down the Dow.

The trend in FNM is lower, so my guess is that the stock will eventually breakdown from the triangle. If it does, it should cause some selling in the broader financial sector which, in turn, should cause some worries to slip back into the broader market.

Alternatively, a breakout, to the upside, in FNM might be a catalyst to firm up the financial sector which, in turn, will be cause for rejoice in the broader market.

Either way, keep tabs on the triangle in FNM. It should prove actionable in the coming days or weeks.

Take a look at the action in the Semiconductor Index ($SOX). Today's high of 415 is a new one for 2008.

BRCM is mirroring the action in the SOX. The stock is cracking its very short-term descending resistance line. Look for confirmation with an advance past $28. Target between $29 and $30 in the next few days for a quick trade.

Some of my new readers from the Forex Factory might be interested in following the unwinding of the gold bull market. Gold is very much the anti-dollar. Gold tends to trend higher when the dollar weakens. Alternatively, gold tends to trend lower when the dollar strengthens. With this relationship in mind, it's worth tracking the short-term bear flag in gold over the next few days as it relates to the forex market in general and the greenback in particular.

APPL has risen from about $115 in March to today's highs near $187. The stock's aggressive ascending channel has served as support and resistance during the climb higher. The channel can be used to manage the position going forward. Simply let your profits run until the channel breaks.

It's been a while since I've highlighted the FXY. Earlier this year, we made a killing by simply buying on the many breakouts from bull flags:

Japanese Yen Signals More Trouble for Stocks

Sagging Dollar Yields Huge Moves in the Market

Watch the Japanese Yen When Timing Buys

I want to put the FXY back on the radar today not only as a potential trade, but as an indicator for the broader market. The FXY has been pulling back since mid-March, while stocks have been rallying. The FXY is rebounding today, from a long-term ascending trend line, and trying to breakout from its short-term descending trend.

A clean break of $97.50 would mark yet another bull flag for the FXY. It might also signal that stocks have further to fall going into next week.

You probably know by now that the financials have been lagging the market over the last six to nine months, although the group did stage a big bounce since mid-March. Still, financials are at risk of further downside which, in turn, puts the broader market at risk of the same.

A breakdown in the XLF from its bear flag could drag the Dow Jones Industrial Average and S&P 500 lower. Keep the XLF on your radar even if you're not going to trade it.

Last time I checked in with RIMM was in early April. Since then, the stock is up by about $15. You can read my past analysis of RIMM by following the link below:

Research In Motion (RIMM) Rides the Trend Higher

Recently, RIMM has been bouncing around near its 52-week high. The stock might pause at these levels, especially if the broader market softens. (Remember the old trader phase: Sell in May and go away.)

Looking beyond the summer, RIMM could be forming a cup and handle. The cup portion of this bullish continuation pattern has already formed. The handle could unfold over the next few months.

Of course, RIMM could rip higher this summer if the NASDAQ rallies. RIMM is on the top of my buy list if the broader tech sector does breakout.

Obviously I'm excited about the move in APC today, along with the continued upside in the Natural Gas Fund (UNG), which is an exchange traded fund that tracks the commodity.

But no matter how excited I get or how confident I am that a trade will work, it's incredibly important to remember to never over-leverage a single sector. Natural gas is great and I think the sector will continue higher, but you can't take excessive risks. Stay diversified!

To catch up with some of my analysis on natural gas, you can go to the following post:

Natural Gas (UNG) About to Break from Bullish Triangle

The UNG is an exchange traded fund that tracks the underlying commodity. It's one of the purest ways to play natural gas without going into the futures market. Today, the UNG is breaking above $53.

Among the stocks in the group, Anadarko Petroleum (APC) is breaking out from a short-term bull flag. APC could run higher over the next few days if it can clear $70.

The rebound in the XHB -- about 53 % from the January lows -- is one of the most under-reported stories in the financial media. It's kind of funny when you think about it because the homebuilders were one of the leading indicators going into the credit crunch and subprime mess. So, might it be possible that the homebuilders are pointing to a recovery in the economy?

The best way to trade a recovery in homebuilders is through the XHB because it keeps you diversified. If you must pick one name in the group, I would go with RYL. It's still my favorite. I've been trading RYL, and following the homebuilder rebound, since the beginning of the year. You can read more my earlier calls by following the links below:

Ryland (RYL) Rebounds from Triple Bottom

Housing Stocks Lead Recovery

Ryland Group (RYL) Soars Higher by 15 Percent

Housing Stocks (XHB) Could Rebound Higher

As of today, the XHB is trying to breakout from a bullish triangle. I still think this trade has legs, which is why I'm putting the XHB back on your radar today. Look for an upside try early next week. Confirmation will come if the XHB breaks $24.50.

Many, many technical analysts are following the 1400 level, plus or minus a few index points; therefore, I wouldn't put too much weight in the breakout. Such closely watched levels usually have a way of confusing the majority of traders. So, I wouldn't be surprised to see some volatility in the coming sessions.

Still, there are a lot of good trends out there in individual stocks, surprisingly both up and down. There's a massive rotation going on right now with stocks up, bonds down, the dollar up, and commodities down. This rotation is causing a lot of movement beneath the surface. Take a look at two recent patterns I posted and see where these stocks are trading today.

Triple Top in Exxon Mobil (XOM) Weighs on Broad Market

Google (GOOG) is Forming Tight Flag After Gap Higher

The company reported earnings that fell short of estimates. The news caused the stock to breakdown from a classic bear flag. The short-term ascending channel, which has been in place since mid-April, served as the flag for the set-up. Within the context of the downward trend, the short-term ascending channel serves as a nice action point into bearish positions once the channel is broken.

In the short-term, the stock could bolt up to $580, using the distance between support and resistance and adding this $20 to the upper-end of the bull flag.

Looking out further, GOOG could make its way above $600 if it breaks the bull flag. Look for a break and close above the $560 level to inspire further short covering and additional momentum buying.

AMZN broke out from its head and shoulders bottom about five trading days ago. The neckline of AMZN's head and shoulders bottom is at $80. The stock is finding support at this level, which is a positive sign and points to further upside.

Using the right shoulder from $70 to the neckline at $80, you can add the $10 difference to the neckline to arrive at a short-term price target of $90. A longer-term price target can be obtained by adding the distance between the head and neckline to the neckline. A longer-term price target, therefore, is approximately $100.

You can see other examples of head and shoulders in the current market by visiting the posts below:

Head and Shoulders Bottom in China Stocks (FXI)

S&P 500 Pauses at Neckline of Head and Shoulders Bottom

Revisiting the Head and Shoulders Bottom in the S&P 500