11:14:07 PM EDT |
2012: Technical Trading Review
It's been my experience, borne out in 2012 certainly, that in most years there are just 4-5 instances of major price swings in the Market; where upside or downside reversals lead to at least a 10% move.
6:45:46 PM EDT |
Chart Smarts: What They 'Say' About the Cliff Rift
The major index charts continue bullish in their patterns and suggest that the outlook is that political compromise will come now or later. A move to at or near the prior highs may then be the real test of market strength and the 'Wall of Worry'.
9:48:08 PM EDT |
Calculating a Second Up Leg Based on a First Advance
There are some technical methods of estimating a next advance (or decline) based on the first up (or down) leg. One common way is to calculate a so-called 'measured move' objective.
10:17:18 PM EDT |
Mind The Gap!
Upside and downside price gaps sometimes provide solid clues both for 'confirming' trend reversals and providing a gauge for the duration of a next market move.
7:08:22 PM EDT |
Retracements: Usefulness in Estimating possible Lows
A technical tool that's often useful in assessing how far the major indexes might fall in a correction is by calculating Fibonacci retracement levels. Such retracements may not target a precise correction low, but can provide useful guidance on downside targets.
9:52:44 PM EDT |
The '1-day Rule' and Patterns in Downside Corrections
A rule of thumb about trendline, support/resistance, and moving average breaks is to discount a single-day's such Close.
Another question I'm asked is on technical price targets for this current downside correction.
10:39:21 PM EDT |
Some Corrections Are More Predictable Than Most
Tops can be hard to pinpoint given the tendency for higher highs or repeated rally attempts. However, sometimes technical clues to tops show up in multiple ways.
9:11:25 PM EDT |
Current Predictor Patterns; NDX channel, SPX flag, GOOG arc
Technical patterns showing us useful trade input recently included pinpointing some key resistances in Nasdaq and suggesting how much follow through S&P would have recently.
10:14:18 PM EDT |
When the Market Stays Up (but it 'should' come down)
I try to avoid expectations of what the market should do based on a future we think MUST happen based on what's up with the current economy. If it was that simple we'd all be rich traders.
8:22:22 PM EDT |
'Flag' Patterns and Volume Relative to Price Action
Examining trading volume helps measure intensity of a move, especially in individual stocks. The same volume analysis doesn't always mean as much in looking at the overall market.
10:20:26 PM EDT |
'V' Versus Rectangle Tops or Bottoms
V-Tops and V-Bottoms tend to be good forecasting patterns in predicting trend reversals. However, after a prolonged run up, is a sideways move (rectangle] a top or a consolidation?
8:15:27 PM EDT |
Wild West of Trading
A question arises as to how vulnerable we still are to wild price swings because computers run amok. This, after a programming malfunction unleashed a melee of unintended stock orders this past week.
8:55:04 PM EDT |
Dueling Trendlines; Fed to the Rescue? - Charts Say No
A well-defined bearish down trendline 'closes in' on a bullish up trendline. The 'better-defined' down trendline suggests no Fed-inspired Market breakout soon.
9:09:49 PM EDT |
Trading Use of Hourly Chart RSI Extremes
In a market with two-sided trading swings such as seen in 2012, use of multimonth hourly index charts coupled with a 21-hour RSI indicator can identify trade opportunities.
10:44:43 PM EDT |
Two Types of Trendlines; Head & Shoulder's Bottoms
I expand on the two 'types' of trendlines, with consideration of the usefulness of internal trendlines. Also, a look at some examples of Head & Shoulder's bottoms seen on long-term stock charts, as opposed to those seen on shorter-term index charts recently.
10:51:09 PM EDT |
A Matter of 'Degree'
I got a question as to my current interpretation of the last two sizable market corrections; last summer and since the May top. This led me into a re-interpretation on one hand and a fuller explanation of where I think we are currently in the unfolding trend.
10:24:54 PM EDT |
Anatomy Of A Bottom
I got some questions regarding the last market low as to whether I thought it was a 'final' bottom. I think so and I want to expand some on the subject of the common pattern traced out by a bearish correction.
8:30:44 PM EDT |
WAVE Patterns as Trend Predictors
A Subscriber asks about my recent analysis that the recent free fall in the US stock market may have run its course. My concept of this was at least partially based on possible completion of a common corrective wave pattern.
10:01:59 PM EDT |
Trading on Shifts of Momentum
A Subscriber asks what it is to look for stocks or indexes that start losing momentum and then to go the 'other way'. This was my mentor's way of trading and there's a method to it.
9:37:36 PM EDT |
Chart Gaps: Now You See Em, Now You Don't
An island bottom pattern formed at recent lows in Nasdaq, consisting of matching price gaps. More on the chart gap phenomena and why a Nasdaq 'island top' is also something to consider.
8:44:25 PM EDT |
Risk to Reward Considerations in Trading
Not adhering to risk protection or exiting stops is the cause of many losses getting out of hand. Also important is exiting when trade objectives have been met or where 'trailing' stops take you out of a trade.
7:28:50 PM EDT |
Recent Head & Shoulder's Tops; Constructing Trend Channels
Formation of hourly chart 'Head & Shoulder's Top' patterns preceded the recent correction. Constructing uptrend price channels requires occasional re-drawn trendlines.
11:42:19 PM EDT |
Adjusting Trendlines and Trend Channels
As corrections develop in our still strong uptrend, such downswing lows often necessitate re-drawing or adjusting up trendlines. There are also two different types of trendlines that come into play; internal and 'external'.
10:09:11 PM EDT |
Stand-Alone Reversal Clues; Resistances at New Highs
There are times when just 1-2 indexes provide chart clues as to the trend for the overall Market. Another topic is how can potential resistance be assessed given a move to new highs with no prior top for gauging resistance?
8:23:58 PM EDT |
Common 3-Part Pattern to Downside Corrections
It's quite common for downside corrections in bullish trends to trace out 'a-b-c' or down-up-down price swings. The UP part doesn't last long and the second decline is longer and stronger than the first typically.
7:28:30 PM EDT |
Trade Ideas when Resistance 'Becomes' later Support
A common chart pattern is seen when resistance is pierced and subsequent pullbacks find support in the same area. The same is true in reverse, where support 'becomes' later resistance and it applies to trendlines also.
11:46:45 PM EDT |
Changing Of The Guard
The concept of an Index bellwether is a big name stock that tends to LEAD the Index by showing strength or weakness ahead of the Index it's part of. The S&P and Nasdaq 'bellwethers' have changed over the past 12-15 months.
11:44:08 PM EDT |
Sideways Moves and When Support 'Becomes' Resistance
Sideways moves in an overbought market start 'throwing off' an overbought extreme and prices might not fall much. Also, support once pierced, tends to become subsequent resistance and vice versa.
11:48:34 AM EDT |
Pay Attention to Earliest 'Breakouts'
Pick the right 'horse' in the indexes! Waiting for the S&P 500 to clear prior highs was behind what had already happened in the big cap S&P 100 and way behind prior action in the Dow.
12:49:07 AM EDT |
Bullish Breakout Above a Broad 'Triangle'
A chart pattern seen sometimes in stocks and indexes is a 'triangle' formation. This pattern tends to have certain outcomes when there's a breakout above or below triangle trendlines and currently one such triangle suggests further upside potential.