UBS (UBS), a major financial and investment company with headquarters in Switzerland, announced April 1st that it will write down another $19 billion dollars in ‘sub-prime’ investment losses, yet their stock rallied sharply on this news. Why? According to a New York Times article yesterday, which was one of many sources to report this development,…
The US Dollar Index ($USD) showed signs of life recently, forming a potential short-term reversal pattern. Let’s look: The Index formed an all-time low just beneath 71 on March 17th before reversing upwards to form a semi-hammer (or long-legged doji) pattern which can mark reversal points in a market. Following the doji reversal, price rallied…
The Financials Sector (XLF) has received considerable attention as of late, but let’s look at the chart for a few more insights: The small horizontal hash-marks represent the series of lower lows and lower highs which have defined the prominent downtrend, and this structure has not been broken yet. Price recently formed a higher low,…
I just discovered this interesting graph from Finviz.com (under the Services section) regarding probabilities of a daily gap filling. While they don’t discuss their methods or the period observed, the main idea of the study is two points: The probability of an overnight gap being filled increases as days progress; The larger the gap, the…
First of all, today’s action came as a surprise to so many traders, myself included. Let’s look at some key facts to discover what may have changed due to today’s action: First, the DIA (Dow Jones ETF) Daily: Price aggressively violated its 20 and 50 period moving average, giving no respect to these levels. Recall…
Over the last few weeks, both gold and crude oil prices have become more volatile, both rising quickly and falling quicker. Let’s take a peek at some of the charts and what it might mean for the stock market: Crude Oil Prices: Recall that Crude Oil prices are quoted in US Dollars, and the dollar…
How were your trading results for the first quarter? The S&P lost 10% last quarter (and year to date), and the following chart shows the returns in Q1 for the major US Market Indexes: That was actually the worst quarter in five years! How did the market begin the 2nd quarter? So far (intraday), the…
Microsoft Corp (MSFT) may be building a potential chart formation base (or platform) of consolidation and may attempt a rally from current levels. A positive momentum divergence is forming as the swings narrow and the price stabilizes around the $27.00 level. Recall that price alternates between range expansion and contraction, and the expansion has been…
The intraday index action today provided some ideal opportunities within the price structure that could have led to profits. Let’s check out the Dow Jones: First, the day started out with a relatively small overnight gap, and the first play of the day was to fade the gap back to yesterday’s close. Once that downside…
The Dow Jones Index this morning (along with the S&P 500) formed an ideal ‘gap fade’ play which then set up a positive momentum divergence. Let’s see the chart and figure out how we could have taken advantage of this situation. The overall structure is in a strong downtrend, but the most recent price swings…