Today’s action was a classic example of the “Trend Day” concept, where price swings carry the index value lower, and up-swings become key opportunities to ‘get short’ or re-establish a core position. DIA (Dow Jones ETF) 5-minute chart: We had a large momentum impulse to the downside to start the day, and the failure of…
While nothing is certain in the markets, if we use basic principles of technical analysis, it would appear that oil prices are expected to continue their uptrend higher, and there is no resistance in sight, but there are clear support levels beneath. First and foremost, trends – once established – have greater odds of continuation…
While 2007 was an up-year for the US stock market, 2008 is off to a rocky start so far. We saw the Dow Jones Index fall 100 points on Monday and 220 points today, taking price through a technical barrier and setting the stage for a potential technical breakdown. Let’s look at the Daily Chart:…
How great did your mutual fund do this year? Mine underperformed. I try not to look at the performance of my long-term retirement/mutual funds because I want to trade them I get very angry I wish I were invested elsewhere The same cycle is true again this year, and this may be the death knell…
I cannot underscore the importance of a personally created trading plan to help guide you to success. Plans address a series of contingencies and document your anticipated response when any of these events occur that require your decision, whether to enter, exit, hold, place a stop, or diversify. Without such a plan, or a basic…
Here is an interesting study on the intraday price action in the DIA (Dow Jones ETF) for December 28, 2007, which includes the most perfect “Gap Fade” Play I’ve ever seen. Gap Fade play: This example of a gap fade is one of the most perfect examples in that the gap was clear, was less…
The expected “Santa Rally” has not gained much traction in the overall markets as anticipated. The stock market is winding down in volatility for the end of the year and is setting up for a potential larger breakout. Observe the ‘triangulation action’ in the market, as evidenced by the converging trendlines that form a semi-triangle….
Yahoo (YHOO) on its 15-minute chart recently completed three clear technical chart patterns worth studying further. Let’s look and then I’ll describe them: Price was selling off into a downtrend, but a momentum divergence (bottom oscillator) formed with price selling off but momentum turning higher. The potential for a short-term reversal increased. Price did indeed…
2007 will partially be known as the “Year of the Commodity Boom” due to the fact that some major commodity prices, including crude oil, hit new all-time highs and provided savvy traders with numerous opportunities for profit. Let’s look at some of them in no particular order: Corn (continuous): Wheat (continuous): Gold (continuous): Crude Oil…
Traders have been anticipating the occurrence of the fabled “Santa Claus” rally, in which equity prices rise around the Christmas holiday, and it appears it has arrived just in the “nick” of time. Albeit the rally may not be to the magnitude traders want, but we are seeing a current upswing in price that has…