We often become conditioned by our experiences to ‘fear’ or avoid certain things and to gravitate to, or favor other things. The process of conditioning occurs deep within us, and sometimes conditioning occurs with such subtlety, that we may be unaware of the effects of our environment (or situations) on our behavior and perception. Without…
Score one for the so-called “Plunge Protection Team” today! We had a 300 point surge on the Dow, which hasn’t occurred since October 15th, 2002. The Fed surprised the market with a ‘larger than anticipated’ 50 basis points cut. The market anticipated a 25 basis points cut, and likely already had that ‘baked in’ or…
ImClone stock probably is most famous for being the stock that “took down” Martha Stewart for potential insider information, but I wanted to show a recent power move and major gap fade that occurred within the last week for education’s sake. Ouch. Traders who bought – and there were many who did – around September…
In my trading, I frequently utilize strategies that are dependent upon an initial condition that arises from a new momentum high or low. The basic market principle that I derive these strategies is stated as “Momentum Precedes Price,” indicating that when a new momentum extreme is reached, a new price extreme in that direction is…
The past week was positive for the market, in terms of percentage gains. We saw the Dow Jones Index increase just over 2% for the week, with four up-price days and only one down-price day. The technical picture of the major indexes show rangebound conditions, yet a major impetus is on the horizon – Tuesday…
The Dow Jones ETF – the Diamonds (DIA) – and broad market completed an amazing “Fade the Gap” trade with few if any ‘hiccups’ along the way. It’s worth viewing for further study and reference: The gap close target also corresponded with the daily pivot point, providing an excellent target. What happens afterwards is beyond…
Reader Glyn recently asked me to give my thoughts on the technical picture of a few stocks he is watching, including whether or not a possible triple top is forming in some of these candidates. The stocks are Amazon (AMZN), IBM (IBM), Best Buy (BBY), and the China ETF (FXI): Amazon.com Inc: Observations: Double Top…
I recently came across the following deep and interesting link on StockBee‘s site, in reference to an article by Matthew Rees entitled “The Hunt for Black October.” Author Rees discusses various perspectives from the events leading to the major 20% decline in the Dow Jones Average on “Black Monday,” October 19, 1987 and includes many…
With the recent declines of February and August 2007, many traders – who were rapidly making money – experienced deep fear and losses and may now approach the financial markets differently as a result of these ‘shock’ declines and potential major account losses. It only takes one or two instances where you are shaken to…
Richard from Move the Markets provided a detailed post earlier this year entitled How to be Consistently Profitable in the Markets which absolutely deserves reading and further study. Without stealing too much of his thunder, Richard begins his discussion with the popular topic of Expectancy and provides a new calculation for the concet which eliminates…