Dow Observation and Bonus Charts

Jun 26, 2007: 4:54 PM CST

Monday was an absolutely wild day for traders, with a large volatility price swing. As hectic as the trading day was, an interesting pattern emerged.

The intraday low coincided with the rising 50 EMA and with the round number 13,300. This was a significant support area.

The high of the day coincided with the flattening 20 period moving average (almost) and neared 13,500, a round number resistance. This now establishes a short-term trading range until price can eject from this 200 point range.


As for the bonus charts:

Google perfectly completed its Impulse Buy trade I highlighted recently (odds now favor a pullback):


Jabil Circuit (JBL) recently surged to a new momentum high, yet its gap is being ‘faded’ and could setup an Impulse Buy trade (or even a “Sweet Spot” trade if it breaks its downtrend):


Finally, Wal-Mart is having a little bit of trouble after its recent surge in price, and may be stabilizing for a ‘buy’ (or at least support):


Wal-Mart serves as another example where buying on news/earnings can cost you when so many retail traders surge in with wildly bullish hopes and dreams.

As insane as it sounds, money is often made more reliably by trading against retail traders’ euphoria for whatever reason.

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