Gold prices appear to be in the middle of forming a consolidation pattern that resembles a standard triangle pattern. This seems reasonable, given the immense run-up in gold prices following September (there was a minor triangle pattern – not shown – that preceded the recent large volatility move). Triangles are “pause” patterns that represent consolidation…
Just after noon Eastern, the major US indexes complete the 1, 2, 3, Gap Fade tactic, which has been working extremely well over the last few months. As a refresher, any time a gap occurs on (especially) the Dow Jones (or DIA) that is less than 100 points, the strategy that I find that works…
Deere and Company (DE) has been perhaps an overlooked giant the last few years. While people have been focusing on high-flyers like Amazon (AMZN), Research in Motion (RIMM), Google (GOOG), and Apple (AAPL), Deere has been creating similar patterns and similar price appreciations. Their 2 for 1 stock split earlier this week made the stock…
It’s time to take a brief technical look at the stock market and see what’s happened and what may lie ahead. From the top (using the Dow Jones Industrial Average), we are in a daily downtrend and are threatening to be in one on the weekly charts. Prices have risen in the previous upswing to…
The TyroTrader presented interesting thoughts in “Society and Trading” which questions how much social support you receive from your friends and family while pursuing a career as a retail trader. He references Nassim Talib’s book Black Swan and addresses differences between a society in which everyone works diligently day by day to make a decent…
Ford Motor Company (F) recently completed a compressed Head and Shoulders pattern that exceeded the price projection inherent in the pattern. The Head and Shoulders pattern in Technical Analysis consists of an initial swing (left shoulder) that results in a second higher swing (head) and terminates with a failure swing (right shoulder) that takes price…
There is temporary reason to be optimistic on the US Dollar Index with its recent momentum divergence, which has already achieved its index price target. Momentum divergences are – by their very nature – countertrend trades and often are applicable only for a small target, such as a return (snap-back or reversion) to the 20…
Freddie Mac (FRE), chartered by Congress to increase the supply of money that mortgage lenders can make available to homebuyers, recently suffered an astounding price decline and horrific downtrend that culminated in a potential exhaustion gap which has now been virtually eradicated. The stock represents a unique company that is at the center of the…
What would be the ideal picture of a technical downtrend? A few names come to mind but let’s examine Pulte Homes (PHM): I have annotated the Daily Chart of Pulte Homes (PHM). Let’s define a downtrend using the simplest two definitions possible: A series of lower lows and lower highs The 20 period moving average…
It’s time to expand our horizons beyond the stock market to other inter-related markets and also glean insights from the sector rotation model. All charts are courtesy StockCharts.com, and we will be examining the “Intermarket Relationships” profile of the last 200 days first: I have highlighted the clear negative correlation (inverse relationship) between commodities (blue…