Adam Hewison of INO.com has introduced a new series entitled “Trader’s Whiteboard” in which he shares basic education regarding trend, trading set-ups, risk management points, and targets. In the first educational video, Adam discusses how to identify a trend and how to take advantage of the trend with entries and exits once you identify this…
The intraday price action of the DIA recently formed two back-to-back ascending triangles, which resolved nicely according to classical technical analysis. Let’s look at them: The first triangle occurred after Wednesday’s overnight gap as price consolidated into a coil, with upper resistance coming from the declining 20 period moving average, but lower support steadily rising…
Continuing the thought from my last post asking whether Fed Rate Cuts are Actually Good for the Market, I thought I’d compare the 2 Year Treasury Note, 30 Year Treasury Bond, and the S&P 500 and overlay the recent Fed Rate Cuts on the comparison chart. Let’s see what happened: The chart begins in June,…
Is it really as simple as “When the Federal Reserve cuts rates, it’s great for the market” or “When the Fed raises rates, it’s bad for the stock market”? Michael Panzer of Financial Armageddon recently asked this question, as well as provided an excellent graph detailing stock market returns and Federal Funds rate at his…
Friday in the stock market gave us an almost ideal example of the classic rolling momentum divergence and balanced shift in demand from sellers to buyers. Let’s view the pattern: This is the DIA 5-minute chart. Notice the higher lows that continuously form in the momentum oscillator as price makes new intraday lows. Eventually, the…
Research in Motion (RIMM), famous for the Blackberry and volatile stock prices, has shown investors more than a roller-coaster ride, and also has shown more volatility than most investors can stomach. Let’s look at the harried daily chart: I have tried to highlight just some of the larger gaps (purple ovals) in the stock. Sometimes…
The Financial Sector has experienced a bit of rampant volatility since 2008 began. Let’s look at two ten-day periods and see the absolute returns and how they differ for that period for the XLF sector ETF. Everything was rosy as could be from January 17th until January 30th, 2008: The Financial Sector (red bar on…
Recall from my previous post entitled A Little Edge is All You Need that the Vegas style casino games enjoy a very small edge to keep those millions flowing in each year. Let’s look a little more about how this relates to your own trading. Without delving too deeply, there are two simple ways to…
StockCharts.com has a wonderful tool for evaluating the relation between the interest rates (yields) and the stock market (S&P) in the Dynamic Yield Curve page. Using this tool, you can compare 3 month yields with 2 year, 5 year, 7 year, 10, 20, and 30 year treasury yields and see not only what effect the…
Traders frequently combine volume studies with price studies and indicators to gather a larger picture of where prices may be headed in the future. But in the futures market, traders can utilize signals from Open Interest in combination with price and volume for and enhanced picture. Open interest for any futures contract, be it index,…