Since December 13th, we have seen six out of seven days provide us with some type of “Gap Fade” tactic to use. Gap fade tactics are extremely profitable and easy to execute using only one “indicator”: Price. Let’s look: I have annotated each gap with a blue oval and indicated whether or not (“Y” for…
We have been discussing various gap-fade tactics, and Thursday I mentioned that it’s best not to fade a gap in the Dow Jones index greater than 100 points and the market must have heard us talking about it! I didn’t know the Market read my blog! In all seriousness, there is no technique that works…
We’ve been waiting for this anxiously for months! The US Dollar Index is showing initial signs of strength, and has broken convincingly above resistance on the daily charts. Generally, a stronger dollar (or currency) is psychologically beneficial to the people of the nation, is not always best for all economic parts. For example, companies that…
Here is a sampling of the idealized swing trades that could have been taken for the index action (DIA) for Thursday, December 20, 2007. It was another “U-Turn Buy” day! As always, the FIRST play (trade) of the day when the index (Dow Jones in this case) experiences a gap of less than 100 points…
As you may know, one of my most favorite chart patterns to trade recently is the bull/bear flag. Goldman Sachs (GS) presented one of the most beautiful and clear bear flags possible recently. For a review, a bear flag occurs when there is a large momentum (price) move in one direction and then there is…
While today’s action provided a lot of opportunity for nimble scalpers and day traders, there were some key ‘classic’ patterns that unfolded today that I wanted to view closer here. When there’s a gap in the Dow that’s less than 100 points, the first play is always to FADE that gap and play for yesterday’s…
Last week, I mentioned the consolidation triangle which was forming in Goldman Sachs (GS), and this week, it appears the downside resolution of that pattern is underway. Clear triangulation (consolidation) pattern broken to the downside Volume is confirming (rising) this break Momentum (oscillator) also triangulated, and has broken further to the downside (momentum leads price)…
With inflation concerns picking up, and an economic slowdown virtually a certainty, the US stock market indexes are looking far worse (for the future) than they did at the start of 2007. Let’s look quickly at the momentum development on the Dow Jones: Of interest to this chart, note the following regarding the oscillator at…
With 2007 nearing its close, I thought it would be interesting to look at the #1 best performing, and the #30 worst performing stock in the Dow Jones Industrial Average so far: Can you guess what the #1 stock was? The result may surprise you. McDonalds (MCD), up from $42 to $62 this year (a…
Hopefully the human Michael Baker has not fallen off a cliff, but the stock/company (BKR) has indeed done so recently. We saw a prior healthy uptrend that took prices into the ‘stratosphere’ via the three impulse day move of early September. As usual, ‘what comes up must come down’ and so we have the reaction…