I sincerely hope you weren’t majorly short the Financial sector the last few days – if so, I hope your stops took you out before carnal and potentially devastating damage was done to your account. Let’s look at what went wrong (and right) so quickly. Let’s assume you heard the news of how Financial stocks…
How might we have identified and taken advantage of today’s developing trend structure? Let’s take a couple of perspectives. First, we, along with many other traders, have been expecting some sort of ‘oversold technical bounce,’ meaning odds were increasing for some sort of ‘snap-back’ rally, similar to the visual concept of a rubber band being…
How could the stock of such a well-known company as Starbucks (SBUX) plunge so dramatically in such a short time? Let’s look at the charts to see clues and potentially profitable zones we could have seen on the charts. Starbucks Monthly: The structure of the weekly chart shows a very interesting pattern. The stock languished…
Did the “gap fade” technique deliver edge as usual in the month of June for the Dow Jones Index ETF the DIA Diamonds? Each month I compile the number of trading days in the DIA that had an overnight gap of at least $0.20 (20 Dow Points) and calculate how many of those gaps filled…
Crude Oil has been, and is currently, the focus of an extraordinary amount of coverage in the media, and is a dominant topic at the watercoolers and at home. Ask anyone you see and odds are they have a strong opinion about high crude oil (or gasoline) prices – and it’s probably strongly negative. This…
Shockingly to me and many traders, US Steel (X) violated a breakout pattern in a strong uptrend to create a reversal and strong plunge, suddenly invalidating the pattern and shattering support in a short period of time. US Steel broke a potential triple top and horizontal resistance pattern at the $185 per share level, drawing…
Research in Motion (RIMM) was in the news prominently last week as the stock plunged after slightly missing earnings expectations. The stock has now found temporary support about its 200 day moving average. How far will the bounce go? The logical reaction after a large volatility momentum move down is an inflection (retracement) back to…
Gold prices and the Gold ETF (GLD) broke an interesting descending triangle early this morning that I wanted to highlight to you. GLD 5-minute chart (StreetTracks Gold Trust Shares): Price began the day with a morning gap that was almost instantly faded for the opening trade. Price then rebounded off Friday’s close and the 50…
General Motors (GM) hit a 52-year low yesterday, and isn’t showing much signs of a technical or fundamental recovery. How did the stable blue-chip company go astray? Let’s peek at the chart: To be fair to GM, let’s compare it to Ford Motor Company (F) to see a very similar chart, though Ford is only…
How does flipping a coin relate to trading probabilities? Simple, we can look at different probabilities of trading outcomes based on the distribution that results from a pure 50/50 chance outcome. What do I mean? Although the odds of a successful trade are rarely exactly 50/50, let’s assume that – for the moment – they…