I’m sure a great many stock market traders and especially investors were dismayed and potentially shocked by the severity of today’s action in the major US Indexes. First, we had a large volatility up-day regarding the decision by the Federal Reserve to trim the Federal Funds rate by .25 basis points. Typically, traders expect such…
The Chicago Mercantile Exchange (CME) stock recently carved out a near-perfect technical analysis ‘flag’ pattern formation that can be used as an example for further study. Remember, a flag is proceeded by a sharp price and momentum impulse, consolidates for (usually) less than two weeks, and then ejects upwards in a ‘measured move’ that allows…
Analyst Sam Stovall wrote a most insightful article regarding brief historical lessons regarding past housing contraction cycles and resultant recessions. The article from Business Week is entitled, “Housing… Why All the Huffing and Puffing?” While the entire article is certainly worth reading in detail, here are some key highlights: “We think increased investor concerns… could…
Per recent reader request, here is a brief swing chart or divergence look at the Platinum and Oil charts: (Chart: TradeStation) Jonathan correctly identified a developing momentum divergence forming on the daily futures chart for Platinum. The last ‘swing high’ took place at $1,400 and then now we made new price highs at $1,475 and…
In preparation for the Meeting of the Federal Reserve on Wednesday, why not take a look at some other insightful posts from the blog world: Pivot Level Support and Resistance: How Often Do We Hit Those Price Targets? from Dr. Steenbarger Wizards and Pundits – interesting post from Adam on BIDU at Daily Options Report…
The $CRB (commodities) index made new highs, after having advanced four trading days in a row, three of which opened at the low of the day and trended up to close on the high of the day, indicating decisive strength. Price is now at the top of the Bollinger Band after an extended move up,…
Trendline analysis is one of the oldest and most basic forms of ‘quick,’ top-level technical analysis possible. They are often easily ‘spotted’ yet frequently hold significance in terms of price inflecting off the trendline in a continuation of the current trend. What are some quick tips to assess the validity of observed trendlines? While there…
Inter-market relationships have been performing somewhat according to script lately, so let’s look quickly at what we might learn from the current posture. An overview: Bond prices and stock prices move together (though bonds often lead stocks) The US Dollar Index moves inversely to most commodity prices (inflation based factors) Commodities and bond prices often…
Quick – what would imagine as the worst looking chart ever? I’m sure a lot of images come to mind, and while this example might not be the worst ever, it is definitely worth noting, at least from a ‘trivia’ standpoint. The stock is WellCare Group (WCG) and the price closed Wednesday at $115 and…
Excluding Island Reversals, there are three major types of gaps that occur in technical analysis. Amazon.com does a great job of teaching us the difference between these gaps, as price has presented a near textbook example of the normal progression of the three gap types. Let’s look closer. 1. Breakaway Gap Breakaway gaps occur after…