9:46:37 AM EDT |
2011 Trading Lessons
Some of the trading lessons of 2011 are the same as all years since the turn of the century: smart risk management and taking trading breaks when having a losing streak. During the course of 2011, including the last few volatile months, there were some ways that the charts provided a winning trading guide.
11:24:44 PM EDT |
Using a Technical 'Checklist' in Assessing Trends; Part 2
When I wrote the first part of this 2-part article not too many days ago, the intermediate trend was up. Some technical warnings of the imminent reversal did show up, although I'm now looking at them in hindsight.
12:15:58 PM EDT |
Building a Technical 'Checklist'; Unsure of Big Trend Picture, Add Up Small Clues
Often when a market trend seems to shift but then tacks back and forth, it can seem quite unclear as to where the Market is headed next. Add up the smaller clues to grasp the bigger picture.
2:46:24 PM EDT |
More on Rectangle Tops and Bottoms; and Moving Averages
Major market moves like we're seeing today, are often the conclusion of equally 'major' chart patterns, such as those formed by a lengthily trading range. Examples include so-called rectangles and they can be powerful predictors.
11:02:34 PM EDT |
Possible 'Rectangle' Bottom in the Major Indexes
One way of looking at the chart patterns being traced out in the S&P and in Nasdaq, is that of possible rectangle bottoms. Potential upside breakouts are near, but yet to happen.
11:28:28 PM EDT |
Moving Average Envelopes, Sentiment and the nature of Corrections
Some technical indicators appear to be useful or 'working' again as volatility gets a little less extreme.
11:03:22 PM EDT |
Trend Reversals: Price Patterns plus RSI Extremes
While this market has been difficult to call 'timing' wise, it's not been impossible using relatively simple technical tools. Price action, the Relative Strength Index and my 'Sentiment' model have been jointly useful.
1:37:07 PM EDT |
Technical 'Models' During Market Extremes
Prices fall outside 'normal' parameters during free fall declines. Using a variety of indicators become necessary.
10:21:26 PM EDT |
Possible Buy Point Suggested by Moving Average Envelopes
The Moving Average Envelope indicator has proven useful as a 'signal' to buy calls on downside extremes, especially when RSI and Bullish Sentiment also reach key lows.
7:01:25 PM EDT |
Using the On Balance Volume (OBV) Indicator
The On Balance Volume (OBV) technical indicator is useful at times as a 'confirming' or 'divergent' indicator relative to price trends in individual stocks.
8:16:16 PM EDT |
Benefits In Using Moving Average Envelopes
The major stock indexes lend themselves well to using the moving average envelope indicator to help in trade selection and timing. That is, simple moving average envelope lines that 'float' 3-4 percent above/below a 'centered' 21-day moving average.
11:14:39 PM EDT |
Reversal patterns: V-tops and V-bottoms
The most common bottom pattern is the V-bottom and there are some characteristics of such bottoms that can help you identify them. The inverted (upside down) V-shaped top isn't seen as much, at least in a bull market.
10:21:06 PM EDT |
Reversal patterns; Pt. 2: Rounding versus Rectangle and 'V' Bottoms
Upside objectives can be roughly guessed at in two of three types of bottoms reversal patterns. Bull flags, a type of continuation pattern, also has approximate upside objectives.
11:19:37 PM EDT |
Reversal patterns; Pt. 1: Rounding Tops and Bottoms
A pattern that was traced out recently on hourly stock index charts over a period of 2+ weeks was that of a rounding bottom. This type bottom formation 'set up' a reversal of the prior intermediate-term bearish trend.
12:15:38 AM EDT |
Signs Indicating a Tradable Bottom or Top
I call them my 'big 3' chart and indicator patterns. Number 1 and first among them, is price action such as a possible double bottom when accompanied by extremes in 2 other indicators.
6:40:23 AM EDT |
Continuation Patterns: Bull and Bear 'Flags'
So-called bull or bear flag patterns that form on stock or stock index charts, suggest a consolidation before a further push in the same direction as the trend immediately preceding the formation of the 'flag'. Flags are useful in trading since they project a further rally or decline.
11:42:23 PM EDT |
Chart Gaps Can Tell a Tale
There are important clues to stock trends that can be seen in various kinds of chart 'gaps'. Knowing where we are in a trend, (beginning, middle or end) is half the trading battle.
9:18:27 PM EDT |
Technical Analysis series; #29: Double (& Triple) Tops/Bottoms
In a recent Trader's Corner (TC) article I wrote about research done by Andrew Lo at MIT regarding 5 chart patterns that he could demonstrate had future predictive value in terms of the trend. One pattern was the double top.
9:04:35 PM EDT |
Technical Analysis series; #28: Rectangle Tops and Bottoms
The term is a little outdated, but if someone called you a square, you might feel offended. If someone described a stock or index as forming a 'square', that may be useful information.
12:29:50 AM EDT |
Technical Analysis series; #27: Broadening Tops and Bottoms
A chart pattern seen before the last market sell off, in technical analysis terms, was that of a broadening top; further descriptive adjectives were a "bearish rising 'broadening' wedge pattern". This mouth full calls for a fuller explanation!
11:40:07 PM EDT |
Downside Targets Implied by Various Chart Patterns
Following up on the 'success' of predictions suggested by measuring implications of chart patterns that formed prior to the recent decline and subsequent upside rebound.
11:34:25 AM EDT |
The A-B-C's of Downside Objectives & Bearish Rising 'Wedge' Patterns
I've been looking for somewhat lower levels recently based on two different chart patterns. One relates to the unfolding segments of a 'typical' bearish correction pattern and the other relating to two trendlines that form a wedge.
10:26:09 PM EDT |
MAILBAG: A Correction Versus a Trend Reversal; Double Tops
Our recent sharp pullback looks like a correction rather than a reversal of the intermediate-term trend. How to figure whether a dip in a bull market is an opportunity for the bulls versus a bearish play on a further decline?
9:53:22 PM EDT |
Moving Average Indicators: As Support & Resistance (TA #26)
Moving averages are not unlike trendlines; they not only help measure the direction and momentum (the relative angle) of a trend, but can alert us to when a trend has reversed on a short to intermediate-term basis.
11:44:52 PM EDT |
Technical Analysis series (25): Bull and Bear 'Trap' Reversals
I got some questions on whether today's action constituted a technical downside reversal. The short answer is no, but it prompted me to pen this piece about reversal type patterns.
1:21:51 AM EDT |
Technical Analysis series (24): Overbought/Oversold concepts
A Subscriber asked me to explain how technical indicators that show an 'overbought' extreme week after week are all that useful. My answer is these type indicators are just a footnote when the market is in an especially strong trend, but other periods are different.