Could we be on the verge of a new downtrend on the US Indexes? Let’s look at the past for some clues. Uptrends are defined as a series of higher highs and higher lows. Downtrends are defined as a series of lower lows and lower highs. To change an uptrend, price must first make a…
The implications from Sector Rotation Theory are showing more bearish/defensive themes are occurring with money flow across the nine major US Sectors. Over the last 65 days, energy prices led the charge with the greatest sector percentage increase, and we are seeing significant strength as well in the usually dormant utilities sector. Consumer staples (a…
I am relatively surprised with the relative bearish ferociousness that is occurring in many high-flying technology stocks and the broader indexes at the moment. Let’s take a closer look. We expect prices to move in relatively stable and tradable “swings” in terms of action/counter-reaction, buying impulse/selling counter-impulse in a seemingly perceivable rhythm. It’s when this…
Ever wanted to know what to do when there’s a gap up or gap down in the US Indexes? Here is a type of strategy that can help you add profits and clarity when this situation occurs. Here are the general rules for Index Gap occurrences: The first play should be to “fade” the gap…
Inter-market relationships are seemingly following their script. Interest rates are declining (bond prices are rising), commodities are rising, and the dollar index is declining. There has been absolutely no relief for the US Dollar Index, and it has continued to make new lows. Today, we registered a new momentum low, which indicates slightly higher probabilities…
Gary at The Smart Money Tracker posted an excellent observation that is one of the basic tenets of technical analysis: The Larger the Consolidation Period, the Larger the Move out of Consolidation. This concept is based in the Fourth Principle of Price Behavior which states that “Price Alternates Between Range Contraction and Range Expansion.” Price…
Traders can often find ‘sleeper stocks’ that offer great potential for profit by running sector and industry scans and determining which industries have been showing greater relative strength or weakness over a specific period. The following results are from a three-month industry group scan from Prophet.net (the graph dates are read right to left in…
It’s that time of year again! The Money Show is hosting its annual winter Trader’s Exposition (one of three) in Las Vegas from November 15-18 at the Mandalay Bay Casino. Rather than explain all about it, I wanted to direct you to a post by the Trading Goddess summarizing the conference. The official link is…
Many traders use different forms of analysis for moving averages, and understanding basic facts about moving averages can add new potential for profit in your own trading. While there are ‘hard and fast’ rules to using moving averages, the best results often come from novel or unique interpretations of basic concepts, or variations on ‘old’…
Let’s take a brief look at some charts that have interesting implications or patterns occurring right now: Citigroup (C): New Momentum Lows, indicating the potential for lower price lows Bearish surge in volume Bearish potential breakaway gap or measured (continuation) gap that filled Bearish Breakout from consolidation range Let’s hope that, in this case, this…