Crocs Inc (CROX), makers of the unique, comfortable shoes, has suffered yet another downside gap today. What should you do with the stock – if anything? Notice the strong down-trend which has been prevalent prior to the start of 2008. Since then, the stock experienced two downside gaps which were unfilled (also known as continuation…
Today’s price action so far has been nothing shy of stellar and ideal for those who love to ‘fade the gap’. If you would like to know what a clean and ideal gap fade trade looks like, then keep this one for your records. The market opened with a relatively large impulse up that was…
Knowing how the market (or a stock) opens in relation to yesterday’s trading can give you a clue about what’s likely to happen for today’s trading. What are the three types of openings and what might they mean? 1. No Change This is the most typical opening, where today’s open is either equal or very…
Friday’s action was clearly a ‘trend day down’ in all classic definitions of the concept. How so? And how might you profit if this situation occurs again in the near future? First, let me give some generalizations for a ‘trend day’ Trend days often begin with an overnight gap Breadth is extremely skewed on a…
Take a moment and educate yourself on what a “doji” is and what it might mean. A standard doji is a type of candlestick pattern that is comprised of a single ‘candle’ where the open and close price are equal (or very close) but the high and low of the candle are distant from the…
The VIX (Volatility Index) has now formed clear and distinct channels from which to assess current conditions. I found drawing trendlines on this chart to be difficult, and you may have your own method for drawing a trend channel, so be aware of this when looking at this chart. Right now, the VIX seems to…
Google searches for the term “recession” are on the rise, but have decreased after peaking in early 2008. How might this be of benefit to the average investor? Bill Tancer of Time Magazine recently wrote an article entitled “Googling the Recession” which compared a few terms related to “recession” that were interesting. Tancer noted that…
March was certainly the month for overnight gaps in the US Indexes! I list here the results of my monthly study of overnight gaps in the Dow Jones ETF (DIA – the “Diamonds”) to see the percentages that help determine the validity of the “Fade the Gap” strategy. Let’s look at March’s simple statistics: Of…
In case you don’t follow global markets, I thought I’d show you the amazing, euphoric rise of th Shanghai ($SSEC) Stock Composite Index (China) and its precipitous fall and compare that to the US NASDAQ Composite blow-off of 2000. The monthly chart shows a wild ride for investors, including the stratospheric rise from 2,000 to…
One of my favorite intraday patterns is the bull and bear flags. But how do you identify and then trade these patterns? Let’s focus just on the bull flag for this post. Why do I like this pattern? It is relatively simple to identify, only uses price (no complex indicators), and the stop-loss along with…